Malaysia Airlines – ‘Technically bankrupt’.

Malaysia WikiMalaysia Airlines, once the top model airline in #Asia with world-class service that most wanted to follow is paying hard the latest two news headlines they hit after two accidents MH370 and MH17, both mostly unsolved and unable to find the responsible.

So, the plan, quickly cut as much costs as possible to find a financially viable way to the company. The way, laying-off 6,000 employees (actually they send termination letters to 20k, but 14k are planned to be re-hired in the new created company) and reducing non-profitable international routes and review their fleet, with plans for a potential re-branding in a future. The executor, german business man, nicknamed by some as “the Terminator” due to his accent and his previous experience to lay-off and “put in order” Aer Lingus -the Irish airline that searched for financial recovery.

Malaysia Airlines – in the headlines for all the wrong reasons. Now its new chief executive Christoph Mueller says the troubled airline is ‘technically bankrupt’. He says the decline started long before last year’s disasters. Malaysia Airlines CEO Christoph Mueller, says: “What we currently assume in our financial projection, but you see, the airline business is unfortunately not so easy. Because what we have seen in U.S. Dollar-Ringgit volatility of the last six months, what we have seen in U.S. Dollar fuel price volatility of the last 12 months.”

Malaysia Airlines recorded its worst quarterly loss since late 2011 in its final earnings announcement as a public company in the first quarter of 2014. The loss-making carrier was at the centre of two tragedies last year – Flight MH370, carrying 239 passengers and crew, disappeared in March without trace. And last July, another jet was shot down over rebel-held territory in eastern Ukraine, killing all 298 on board. Mueller now plans to cut a third of jobs, scrap international routes and review its long-haul fleet in a bid to return to profit.

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Malaysia Airlines CEO Christoph Mueller, says: “Of course it’s pretty impressive and will affect our bottom line tremendously. Our current projection, ceteris paribus, would give us a fair chance to break even in ’18.” Last August the airline’s state owners privatized the company . But Mueller’s track record is stellar – he successfully restructured Ireland’s state-backed Aer Lingus and spearheaded a revamp at Lufthansa.

Not an easy situation for the airline, and not an easy job for Mr. Mueller. So, we wish all the best for these challenging moments and hope they can recover quickly with the less impact for its employees and customers.

If you have traveled thru Malaysia, have you noticed any change on the quality of the service?

Source: Reuters

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