Written by: Keith Tully
Reviewed: Wednesday 3rd June, 2015
Malaysia Airlines is planning to dramatically restructure its operations after reaching the point of being “technically bankrupt”.
The business was effectively nationalised last year after it found itself at the centre of two high-profile air disasters each costing hundreds of lives.
However, the organisation’s recently appointed chief executive Christoph Mueller has insisted that the company’s financial problems were far from being entirely a result of those disasters.
“We are technically bankrupt,” Mueller told a news conference. “The decline of performance started long before the tragic events of 2014.”
Restructuring plans being undertaken by the airline will involve the creation of a new company and the shedding of some 6,000 jobs from a workforce that until recently numbered close to 20,000 people worldwide.
The 14,000 staff who will carry on in their roles with the airline will see their employment switched to the newly-created Malaysia Airlines Berhad from September this year.
Malaysia Airlines flight MH370 become a global news story in March 2014 when it dramatically disappeared without trace with 239 passengers and crew members presumed to have died in an incident that has not yet been fully explained.
Then, just four months later, another Malaysia Airlines plane was shot down while travelling through Ukrainian airspace, with close to 300 people losing their lives as a result.
With the airline already struggling to compete in Asia and other parts of the world, the twin disasters left Malaysia Airlines in a dire financial position and ultimately facing bankruptcy.
The airline’s new owners, the Malaysian state fund Khazanah, hired Christophe Mueller in May to lead the organisation’s turnaround efforts with the German having earned a reputation as an effective leader in crisis situations.
Mueller has previously led recoveries at both Are Lingus, the Irish budget airline, and Germany’s Lufthansa airline. He has earned the nickname ‘The Terminator’, partly due to his German accent but also because of his apparently tough approach to business recovery leadership.
Malaysia Airlines reported losses every year from 2011 until its shares were delisted from the stock exchange in November 2014. Its losses for the first nine months of last year were worth around £240 million.
16th September 2019
There was around a 25 per cent increase in the number of restaurant businesses entering insolvency over the course of the year to June 2019, according to the latest figures on the subject.Read More