Financial News

  • 1 September 2014, 10:05

Malaysia Airlines Shake-Up After Planes Lost

The impact on Malaysia Airlines from the disappearance of MH370 and shooting down of MH17 has forced it to cut 6,000 jobs.

The tragedies - in March and July respectively - compounded long-running losses at the airline which prompted it to confirm a restructuring of its business.

It said 30% of its workforce would go under the plans, which would also see the company going into private hands again for a minimum of three years.

Its majority owner, the Khazanah Nasional state fund, said Malaysia would be taken off the stock market by the end of the year so it could undergo the painful changes - with the bill estimated at $1.9bn (£1.15bn).

Khazanah forecast a return to profitability within three years of its de-listing.

A restructuring of its routes was also announced although the twice-daily service between London's Heathrow and Kuala Lumpur will continue.

A London-based Malaysia Airlines spokesman said: "The London-Kuala Lumpur route is highly successful and will carry on".

On Thursday, Malaysia confirmed its second-quarter net loss had widened in the wake of the mysterious disappearance of Flight MH370 with 239 people aboard - 153 of them Chinese - after flying far off course from Kuala Lumpur to Beijing.

It warned that the shooting down of MH17 over Ukraine - while not reflected in its financial figures for March to June - would be reflected in its earnings for the rest of the year as passenger numbers fell.

Khazanah Managing Director Azman Mokhtar said: "Recent tragic events and ongoing difficulties at Malaysia have created a perfect storm that is allowing this restructuring to take place".

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