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Malaysia Airlines Plans To Cut A Third Of Its Workforce

Malaysia Airlines planes sit on the tarmac last year at the Kuala Lumpur International Airport in Sepang, Malaysia.
Vincent Thian
Malaysia Airlines planes sit on the tarmac last year at the Kuala Lumpur International Airport in Sepang, Malaysia.

Malaysia Airlines, which last year had one of its planes disappear off the face of the earth and another shot down over Ukraine, is about to undergo an overhaul — one that means layoffs for as many as one-third of its 20,000 employees.

In an interview with Reuters, the company's new CEO, Christoph Mueller, said he plans to run the restructured airline like a "startup." The news service reports:

" 'I'm hired to run the new company entirely on commercial terms and there's very little margin for error,' Mueller told Reuters at the downtown Kuala Lumpur office of Malaysian state investor Khazanah, which took MAS private late last year as part of a 6 billion ringgit ($1.66 billion) restructuring.

" 'It's not a continuation of the old company in a new disguise, everything is new,' said Mueller, who helped turn around carriers such as Aer Lingus, Belgium's Sabena, and Germany's Lufthansa."

The airline has been losing money for several years, and its brand was irreparably damaged by the loss of Flight MH370, which disappeared in March 2014 carrying 239 passengers and crew en route from Kuala Lumpur to Beijing.

Then, in July, Flight MH17 was shot down in eastern Ukraine, killing all 298 people on board.

CNN reports the airline's financial woes predate those disasters:

"Even before the twin losses of MH370 and MH17, Malaysia Airlines was already in hot water — despite previous restructuring plans and billions of dollars in financial lifelines from the government. The company hadn't turned a profit since 2008, and in the three years to 2013, cumulative losses totaled $1.3 billion."

Mueller told Reuters the restructured airline also intends to sell some of its planes, including two giant Airbus A380s. In addition, the airline will be renamed and its fleet repainted.

Copyright 2020 NPR. To see more, visit https://www.npr.org.

NPR News' Brian Naylor is a correspondent on the Washington Desk. In this role, he covers politics and federal agencies.