‘Technically bankrupt’ Malaysia Airlines sends out 20,000 termination letters

The new CEO of Malaysia Airlines (MAS), Christoph Mueller, has previously been dubbed ‘The Terminator’ for his ruthless job-cutting at Ireland's Aer Lingus and Belgium's Sabena.

But for the troubled carrier, once the pride of Malaysia, it appears there is no other option.

MAS is “technically bankrupt” and isn’t expected to break even until at least 2018, but only after cutting staff, selling surplus aircraft and flying less on some routes.

"We are technically bankrupt and that decline of performance started long before the tragic events of 2014," Mueller said yesterday.

His comments coincide with the sending of 20,000 termination letters to the airline’s entire staff, followed by new contracts offered to 14,000 of them.

As expected, 6000 jobs were cut.

With Mueller at the helm, the carrier has plans to “re-invent” its brand from September 1.

Mueller aims "stop the bleeding" in 2015, stabilise the business next year, and seek to start growing again by 2017.

Last year, the airline posted a 305.7m ringgit (over SGD$113m) loss in the April-June quarter following the March 8 disappearance of flight MH370 with 239 passengers and crew aboard.

In July, 298 passengers and crew on board a Malaysia Airlines jetliner died when it was shot down over a war-torn eastern Ukraine.

In August last year, the company was removed from the Malaysian stock exchange and taken completely under the government’s wing, before a takeover by the Government of Malaysia’s strategic investment fund Khazanah Nasional Bhd in March.

Mueller took to the helm in May this year.