New Malaysia Airlines CEO says troubled carrier could break even by 2018

The new CEO of Malaysia Airlines said the ailing carrier could break even by 2018 after cutting staff, selling surplus aircraft and refurbishing its international fleet.

Christoph Mueller said Monday that the airline is trying to sell two of its A380 super jumbo jets and has gone ahead with its previously announced plan to cut 6,000 of its 20,000 staff.

The remaining 14,000 employees have been offered jobs in a new company being set up to take over the legacy Malaysia Airlines business.

The former CEO of Ireland’s Aer Lingus told a press conference that Malaysia Airlines is “technically bankrupt” but can remerge as Southeast Asia’s leading airline.

It is being kept alive by an injection of funds from a Malaysian government sovereign wealth fund after double disasters in 2014 dealt a fatal blow to its already struggling business. The Malaysian parliament passed a law allowing the airline to be restructured under Chapter 11-style bankruptcy protection.

The airline had a good safety and service record before last year’s disasters but the tragedies, and the airline’s handling of the first one in particular, hurt its brand. A Malaysia Airlines jet with 239 people on board went missing March 8 last year while en route to Beijing and no trace of it has been found. In July, a Malaysia Airlines jet was shot down over Ukraine, killing all 298 people on board.

Mueller said the restructuring is a “hard reset” for the airline that will reduce its costs by 20 per cent and give it an opportunity to grow again in the future.

He would not be drawn on whether the airline would adopt a new name or logo as part of a revamp of its brand. But he said a problem for Malaysia Airlines is that the travelling public is regularly reminded of its association with tragedy because the search for Flight 370 is still underway.