Malaysia Air­lines ‘tech­ni­cally bank­rupt’: new CEO

The China Post - - WORLD BUSINESS -

Malaysia Air­lines is “tech­ni­cally bank­rupt,” its new Ger­man CEO said Mon­day as he out­lined plans to sta­bi­lize the fail­ing flag car­rier in­clud­ing 6,000 job cuts.

“We are tech­ni­cally bank­rupt and that decline of per­for­mance started long be­fore the tragic events of 2014,” Christoph Mueller told re­porters, re­fer­ring to two deadly dis­as­ters that rocked the air­line last year.

Malaysia Air­lines took its first ma­jor steps on Mon­day un­der Mueller, send­ing ter­mi­na­tion let­ters to all of its roughly 20,000 em­ploy­ees, fol­lowed by new con­tracts of­fered to 14,000 of them.

The ex­er­cise — which was ex­pected — trims around 6,000 jobs.

Mueller had pre­vi­ously ini­ti­ated turn­arounds at Ire­land’s Aer Lin­gus and Bel­gium’s Sabena that earned him the nick­name “The Ter­mi­na­tor” for his job-slash­ing.

Un­der Mueller, 52, the car­rier plans to “re- in­vent” it­self be­gin­ning from Sept. 1 with an un­spec­i­fied new brand im­age and ex­pected new livery as it seeks to shed the stigma of a dis­as­trous 2014.

In March of last year, Flight MH370 dis­ap­peared with 239 pas­sen­gers and crew aboard and re­mains miss­ing. Four months later, Flight MH17 was blown out of the sky by a sus­pected ground-to-air mis­sile over Ukraine and all 298 peo­ple on board were killed.

The tragedies were the fi­nal straw for an air­line that an­a­lysts say had been poorly man­aged for years, slip­ping fur­ther into the red.

A state in­vest­ment fund took it over in a res­cue bid late last year, tap­ping Mueller to take the helm.

Mueller said he planned to “stop the bleed­ing” in 2015, sta­bi­lize the busi­ness next year, and seek to start grow­ing again by 2017.

Mueller, in an email to staff last month, had warned that a ma­jor over­haul was nec­es­sary as the air­line was weighed down by “un­com­pet­i­tive cost lev­els” 20 per­cent higher than its ri­vals.

Be­sides cut­ting staff, Malaysia Air­lines is ex­pected to trim un­prof­itable long-haul routes, but Mueller said those plans could not yet be di­vulged for com­pet­i­tive rea­sons.

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