Malaysia Airlines to enter state ownership

Malaysia Airlines to enter state ownership

Officials in Malaysia have confirmed troubled flag-carrier Malaysia Airlines will enter state ownership following two disasters in 2014.

As many as 6,000 staff positions will be cut as part of recovery plan to be put in place, representing around 30 per cent of its workforce of 20,000.

The airline will become completely state owned, and a new chief executive will be put in place.

Investigators continue to hunt for flight MH370, the Kuala Lumpur to Beijing flight which went missing in March, while the MH17 air crash in eastern Ukraine in July is also under investigation.

The recovery plan will cost about $1.9 billion the Malaysian government said in a statement.

Khazanah Nasional, the state investment company that owns a two thirds of the troubled firm, will take 100 per cent ownership.

“The combination of measures announced today will enable our national airline to be revived,” said Khazanah managing director Azman Mokhtar.

“Success is by no means guaranteed - while it is imperative that Malaysia Airlines as a critical enabler in national development is revived, public accountability for the use of the funds mean that it cannot be renewed at any cost,” he added.

Long haul routes will be slashed, and the airline aims to return to profitability by 2018.