Malaysia Airlines is technically bankrupt, its chief executive has said, as he announced a restructuring program and plans to cut about 6,000 jobs. The announcement follows the twin air disasters which forced its nationalization last year.
The airline said it had offered jobs to 14,000 of its 20,000 workforce. The move was expected and follows the appointment of new chief executive Christoph Mueller in May.
We are technically bankrupt, Mr. Mueller told a news conference. The decline of performance started long before the tragic events of 2014.
The airline is operating as normal and no flights are currently affected. In March last year, Malaysia Airlines flight MH370 disappeared with 239 passengers and crew aboard. The plane is still missing.
Four months later, flight MH17 was shot down by a suspected ground-to-air missile while in Ukrainian airspace, with the loss of 298 passengers and crew.
The two disasters proved to be the final straw for the already struggling business, which had reported losses for several years as a result of strong regional competition.
Mueller was making his first public appearance as chief executive since being hired by the carrier's owner, Malaysian state fund Khazanah, to lead the restructuring. He has previously had senior roles at Ireland's Aer Lingus, Belgium's Sabena and Germany's Lufthansa airlines. Famed for slashing jobs at the airlines, he has earned the nickname the Terminator.
Malaysia Airlines had previously disclosed plans to cut 6,000 jobs, shrinking its workforce to 14,000. Mueller said the airline could not expect that all of the job offers it had made to existing staff would be accepted. He said this was because the company expected staff to have received offers from rival carriers.
Malaysia Airlines plans to announce a rebranding on 1 September. Mr Mueller would not be drawn on whether this would mean a change to its name, but said all constellations were open.