After disasters, stricken Malaysia Airlines staff brace for job cuts

Tue Aug 26, 2014 5:09pm EDT
 
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By Al-Zaquan Amer Hamzah and Siva Govindasamy

KUALA LUMPUR (Reuters) - As bodies from downed Flight MH17 were brought home last week, a group of Malaysia Airlines flight attendants, in black mourning headscarves contrasting with their pink and turquoise uniforms, sobbed and clung to each other in grief.

    The 19,500 staff of Malaysia Airlines (MAS) now face a new ordeal - a quarter of them may lose their jobs at the unprofitable airline, hit by two jet disasters this year. Flight MH370 remains untraced since its disappearance en route from Kuala Lumpur to Beijing in March.

Deep job losses, route cuts and a change of leadership are expected to feature in a restructuring plan being prepared by Malaysia's government for announcement as early as Thursday, when MAS also reports second-quarter results. Likely the last before being de-listed, the numbers are expected to show plunging ticket sales and heavy losses even before July's shooting down of MH17 over Ukraine.

As state fund Khazanah Nasional [KHAZA.UL], the majority owner, prepares to take the company private and inject efficiency into the airline, it must tackle crumbling staff morale and win over the powerful main labor union if turnaround efforts are to succeed.

"MAS is suffering from an image problem and a problem with the staff," said Nik Huslan, former chief pilot at MAS. "They have to find someone the staff can respect and rally behind."

Even before the lost aircraft tragedies, airline insiders said staff discontent had been growing for years due to strategy U-turns, leadership changes and poor career prospects.

One of the region's most prestigious and fastest-growing airlines in the 1990s, MAS has steadily fallen behind high-end rivals such as Singapore Airlines and been battered by the rise of Asia's budget carriers like AirAsia. The company hasn't made an annual profit since 2010.

    This year's twin disasters have caused new stresses. A total of 186 MAS flight crew quit between January and July, many of them due to family pressure not to fly after the crashes, MAS says. Over 5,000 MAS staff work as cabin crew or pilots and the airline says the resignation rate has now returned to normal.   Continued...

 
A Malaysian Airlines flag flies in front of the traffic control tower at Kuala Lumpur International Airport in Sepang July 18, 2014.  REUTERS/Olivia Harris