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Malaysia Airlines Will Reportedly Cut Routes While It Restructures

August 27, 2014 at 9:10 AM | by | Comments (0)

A few weeks ago, we gave you the scoop on how Malaysia Airlines might rebrand itself given the two unfortunate and unlucky incidents it had this past year. There's no new livery to speak of yet, but the dirty work is about to begin. The airline is reportedly about to launch the first phase of its rival plan, which aims to move it from government/public ownership to one that is privately operated. Unfortunately, it's going to mean the cancellation of routes and the loss of jobs.

The Wall Street Journal wrote yesterday that, according to its sources, "Malaysia Airlines will stop flying to some unprofitable routes in China and other places such as Frankfurt," Australia, and Dubai.

One source told the WSJ that nearly one quarter of the airline's 20,000 employees could be asked to leave during the restructuring. The layoffs will have to be signed off on by the airline employees' union, meaning major severance packages will probably be involved.

Coincidentally, a group of 200 cabin crew employees resigned yesterday, citing "family pressure" in the wake of the accidents as the main reason.

The WSJ's sources said that an official announcement of any impending action could come as early as later this week after the airline releases its second-quarter earnings on Thursday. During the first quarter, Malaysia Airlines reported a $138 million net loss. We'll keep you up to date as things move forward.

[Photo: AP]

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