FOREIGN EXCHANGE, FINANCIAL & CURRENT ISSUES: MALAYSIA AIRLINES: "WE ARE TECHNICALLY BANKRUPT"

Malaysia Airlines is "technically bankrupt", its chief executive officer said, as he announced restructuring and cutting of around 6,000 jobs. The restructuring program comes after years of losses and the two disasters of MH370 and MH17, which forced the company's nationalization last year.

Currently, the airline is operating in a normal regime and no flights are affected.

The move was expected and follows the appointment of new chief executive Christoph Mueller in May, who was hired by the carrier's owner, Malaysian state fund Khazanah, to lead the restructuring.

"We are technically bankrupt," Mr Mueller told at a news conference. "The decline of performance started long before the tragic events of 2014."

The statement said the airline's immediate priority was to "stop the bleeding" in 2015, then to stabilize next year and start growing again by 2017.

Mr Mueller has previously led the recoveries of 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", says BBC.

In March 2014, Malaysia Airlines flight MH370 disappeared with 239 passengers and crew aboard. The plane is still missing.

Flight MH17 was shot down by a suspected ground-to-air missile four month after while in Ukrainian airspace, with the loss of 298 passengers and crew.

The twin catastrophes appeared to be the final straw for the already distressed business, which had reported losses for several years due to an active regional competition.

The carrier had previously disclosed plans to cut 6,000 jobs, saying it had "offered jobs" to 14,000 of its 20,000 workforce.

Mr Mueller mentioned that the airline could not expect that all of the job offers it had made to existing staff would be accepted, as employees could have received offers from its rivals.

1 September is a preliminary date to announce a rebranding.

In certain markets, Malaysia Airlines was a tarnished brand, but he would not say whether the rebrand would involve a change in name, logo or other alternations, Mr Muller said.

In more general terms, he said it was possible the airline might reduce the frequency of flights on certain routes, or reduce the size of aircraft on those routes, but he would not be drawn on if the airline would withdraw from some costly long-haul flights to Europe.

The carrier would not alter its long-haul flights to and from London as they are among its flagship routes.

Credit: mql5.com

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