(MENAFN- AFP) Malaysia Airlines will slash thousands of staff, trim routes, replace its CEO and could see future stake sales to outside investors under plans announced Friday to save it from bankruptcy after two devastating disasters.
State investment fund Khazanah Nasional, which has taken control of the failing flag carrier, said it planned to pump 6 billion ringgit ($1.9 billion) into the airline under a plan it hopes will return the company to profitability within three years.
Khazanah's Managing Director Azman Mokhtar said, however, there were no plans to change the carrier's name - now deeply tarnished by its association with the MH370 and MH17 tragedies.
MH370 went missing on March 8 after inexplicably diverting from its Kuala Lumpur-Beijing course. The Malaysian government says it is believed to have gone down in the southern Indian Ocean, but no trace has been found and it remains a mystery what caused it to go missing.
MH17 went down on July 18 over a region of eastern Ukraine held by pro-Russian rebels. Western leaders say it was shot down by the separatists but investigators have not been able to ascertain who was responsible.
"The combination of measures announced today will enable our national airline to be revived," said Azman.
The restructuring will see about 6,000 - or 30 percent - of the airline's nearly 20,000 employees eventually lose their jobs to help put Malaysia Airlines (MAS) on a "right footing in terms of staff size".
He said the airline would see a "rationalisation" of its flight network - a term Malaysia Airlines has used previously for cutting unprofitable routes - to become a "principally regionally focused" carrier. He gave no further details.
It also would pick a new CEO by the end of 2014, though current under-fire boss Ahmad Jauhari Yahya would stay in his position until July 2015 to ensure a smooth transition.
Azman added that "a sell-down, or partial sell-down, of Khazanah's stake to appropriate strategic buyers from the private sector will be considered" in the future.
Aviation analysts have long said even before this year's plane disasters that deep staff cuts and a scrapping of unprofitable long-haul routes were urgently needed to get the inefficiently-run company on more solid footing.
Khazanah Nasional, which already owns 70 percent of Malaysia Airlines announced plans in early August to acquire all remaining shares and de-list the company as it works to revive it.
MAS has struggled for years to meet the challenge of rising industry competition.
On Thursday it posted its sixth straight quarterly loss for April-June and forecast more red ink over the rest of the year, saying the MH370 and MH17 air disasters and associated stigma have compounded its financial troubles by ravaging bookings.
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