Tags: malaysia airlines | bankrupt | jobs | cut | christoph mueller

Malaysia Airlines Bankrupt? Technically, New CEO Says as 6K Jobs Cut

Image: Malaysia Airlines Bankrupt? Technically, New CEO Says as 6K Jobs Cut
Malaysia Airlines new CEO Christophe Mueller arrives for a press conference at the Malaysia Airlines Administration office in Sepang on June 1, 2015. (Manan Vatsyayana/AFP/Getty Images)

By    |   Monday, 01 Jun 2015 11:24 AM

Malaysia Airlines is “technically bankrupt,” the company's new chief executive said in a news conference Monday as he explained plans to cut jobs, sell planes, and alter routes.

“The decline of performance started long before the tragic events of 2014,” CEO Christoph Mueller said, according to Reuters.

Malaysia Airlines is still dealing with the fallout of two high-profile tragedies that occurred last year. First, Flight MH370 disappeared mysteriously in March 2014 with 239 passengers and crew aboard. One of the greatest unsolved cases in aviation history, the plane's wreckage has still not bee discovered, Reuters noted.

Last July, Flight MH17 was shot down while flying over eastern Ukraine. All 298 aboard the jet were killed.

Mueller was hired last month by the carrier’s owner, Malaysian state fund Khazanah, for the restructuring process. Khazanah made the airline private last year as a part of a plan to return the company to profit within three years, Reuters reported.

The restructuring plans include cutting 6,000 jobs, reducing employment to 14,000, the news agency reported. None of the cutbacks will occur in the domestic network, Mueller stated.

The airline declared it will continue to work as an international service, and there are no plans to reduce it to a regional carrier.

“We will remain a full service international carrier connecting continents,” Mueller said.

Alterations to capacity may include “reducing aircraft size on certain routes, reducing frequency on certain routes, and certain cases abandoning the route altogether,” Mueller said.

Malaysia Airline’s fleet will be reduced as the company plans to review its 13 Boeing Co (BA.N) 777-200ER jets and sell two of its six Airbus Group (AIR.PA) A380 aircrafts.

Mueller’s previously successful restructuring of Ireland’s Aer Lingus and the German Lufthansa will benefit him as he moves forward with Malaysian Airlines. Mueller told Reuters he is aiming for a smaller network and fleet and more concentration on cutting costs.

“Mueller has done good work turning airlines round in Europe that have suffered from political interference with a poor economic backdrop, so he’s had experience of making these kind of difficult decisions,” aviation consultant John Strickland told The Guardian.

The last earnings announced showed the company’s worst quarterly loss since 2011 due to decreases in passengers and yields.

According to The Guardian, Mueller is hopeful the airlines can once again be south-east Asia’s leading carrier.

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Malaysia Airlines is “technically bankrupt,” the company's new chief executive said in a news conference Monday as he explained plans to cut jobs, sell planes, and alter routes.
malaysia airlines, bankrupt, jobs, cut, christoph mueller
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2015-24-01
Monday, 01 Jun 2015 11:24 AM
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