: The restructuring plan for ailing national carrier Malaysia Airlines Systems (MAS) will see a downsizing of its current 20,000 employees to approximately 14,000, a reduction of 30 percent.
Of the 6,000 staff that would be laid off, about 3,500 of them would be offered employment in other companies under the Khazanah Nasional Berhad (Khazanah) stable while the rest could opt for a voluntary separation scheme (VSS).
At the core of the 12-point restructuring plan entitled "Rebuilding a National Icon: The MAS Recovery Plan" revealed today by Khazanah managing director Tan Sri Azman Mokhtar
, there will be a creation of a new company (NewCo) which will house the ‘New MAS’ with the migration of the selected 14,000 employees. The migration of the relevant operations, assets and liabilities from the old MAS or old company (OldCo) to the NewCo will happen by July 1 next year.
The NewCo is targeted to return to profitability within three years of delisting of the OldCo, which will happen by this year end. The NewCo will see a reset of the operating business model to incorporate a lower cost structure – among the savings coming from renegotiated and improved supply contracts and labour practices as well as refocusing more on profitable regional routes rather than loss-making long-haul destinations.
Under the plan, which was worked on for over six months, Khazanah will pump in RM6 billion of investment funding into the NewCo on a staggered and strict conditional basis over a three-year period.
The NewCo targets to relist MAS within three to five years; between the end of 2017 and the end of 2019.
As for the leadership in MAS, Ahmad Jauhari Yahya will continue to lead the OldCo as the Group CEO during this 10-month transition period until July 1, 2015, when the NewCo is envisaged to come into force.
The Board of OldCo will also continue during the same period until further notice.
Khazanah has started the search for a new CEO for the NewCo, with prospects coming from both local Malaysian leadership talent as well as global aviation industry executives. An announcement on the conclusion of this search is expected to be made before this year-end. Analysts
view the restructuring as one-of-its-kind ever seen in history of restructuring in the country.