Tan Sri Azman MokhtarKUALA LUMPUR, Aug 29 (Bernama) — Khazanah Nasional Bhd has unveiled a RM6 billion recovery plan for Malaysia Airlines (MAS) which will see the ailing national carrier inject greater efficiency by cutting its staff size comprising almost 20,000 by 30 per cent and refocusing on profitable regional routes rather than loss-making long-haul destinations.
Under a 12-point plan announced by Khazanah’s Managing Director, Tan Sri Azman Mokhtar, the current MAS entity would come under ‘Oldco’ or old company while the new restructured entity would come under ‘Newco’ (new company) effective July 1, 2015.
“The plan, worked on for over six months, is incumbent upon Khazanah, which now holds 69.3 per cent of MAS, owning 100 per cent of the airline following its move to buy the remaining equity from minority shareholders at 27 sen a share which is deemed as reasonable in the market,” he told a press briefing here on Friday.
Azman said the plan is for Newco to return to profitability three years after its delisting which is at the end of 2017 and relisting possibly in 2018 or 2019.
The Cabinet and the board of Malaysia Airlines have given the green light for the plan aimed at creating a leaner and more efficient entity, he said.
Already reeling from six consecutive quarter losses since 2012, MAS was jolted on March 8 when its Boeing 777 MH370 disappeared enroute to Beijing with no trace to date while it received a further jolt when another B-777, MH17 was shot down over eastern Ukraine on July 17.
MAS incurred losses of a total of RM2 billion from both tragedies. The airline also planned to move its headquarters from Subang to Kuala Lumpur International Airport (KLIA).
On Thursday, MAS, which was suspended today due to the announcement of the plan, reported a pre-tax loss to the tune of RM302.62 million in the second quarter ended June 30, 2014, from a loss of RM165.89 million in the same quarter last year.
The stock was last traded at 25 sen yesterday.
Azman said some 6,000 staff would be laid off under the plan which included a voluntary separation scheme (VSS) as well as offering employment to some 3,500 MAS workers in other companies under the Khazanah Nasional stable.
A pertinent part of the plan is for the government to enact a MAS Act which would act as a guarantee to facilitate the implementation and execution of the plan.
As for MAS Chief Executive Officer, Ahmad Jauhari Yahya, he said the tenure would be extended for a while to facilitate the smooth operations and transition of MAS from the Oldco to the Newco.