Malaysia Airlines Group’s new Chief Executive says the airline will need to come to terms with spending cuts and potential job losses in order to remain competitive.
At a meeting with employees this week, the boss said the airline is currently spending 20 percent more than its competitors.
He said turning around that spend could help the company remain strong as the ringgit weakens.
The announcement comes a month after Malaysia Airlines owner Khazanah Nasional Bhd revealed the company wants to trim as much as 6,000 jobs to reach a sustainable employee number of 14,000.
“We cannot turn the airline around by fixing the revenue side alone. The contrary is the case. The reason for our precarious situation is mainly our uncompetitive cost levels.”
Christopher Mueller, Malaysia Airlines Chief Executive
“We share this problem with almost all legacy carriers around the world, and new low-cost carriers are attacking us.”
When the initial decision to make job cuts were released in April, Khazanah said the airline had tried to protect employees by offering jobs elsewhere, Malay Mail reported.
However, after meeting with union leaders, Mueller said termination letters could be sent out as soon as 1 June.
Retained staff will get new remuneration packages, which Mueller says will be ‘based on market rates’.
Malaysia Airlines has suffered financial losses since early last year when it was hit with two tragedies – MH370 and MH17.
Last month, a proposal was also put forward to sell some of the airline’s long-haul fleet, including six Airbus A380 aircraft.
In a statement Mueller said exploring fleet options to enhance viability of long haul sectors is one area being looked into, however, stressed ‘nothing concrete has been achieved’.
“MAS needs to operate and utilize its fleet at an optimum level besides maximizing revenue on the route it flies. The market needs to give Malaysia Airlines room to explore various options in determining the most viable strategy.”
Christopher Mueller, Malaysia Airlines Chief Executive
On a positive note, the airline has revealed it is treating its guests with ‘royal dining’.
It has recruited Her Royal Highness Tengku Abdullah the Crown Princess of Pahang to create new first class and business class menus.