Malaysia Airlines 'technically bankrupt' prior to double tragedies

Malaysia Airlines 'technically bankrupt' prior to double tragedies

The new boss of Malaysia Airlines has admitted that the airline is “technically bankrupt” and that the decline began prior to last year’s tragedies.

Confirming 6,000 job cuts as part of a three-year cost-cutting turnaround plan, Christoph Mueller indicated that MAS was already in financial difficulties before the tragedies.

“We are technically bankrupt,” the chief executive said. “The decline of performance started long before the tragic events of 2014.”

The former head of Aer Lingus plans to cut staff from 20,000 to 14,000 while a process of aircraft sales will see the carrier look for buyers for two of its six Airbus A380 superjumbos.

The carrier, which was placed into administration last week, is due to be reconstituted as a new company in September, leaving the liabilities of the current business behind it.

Mueller believes the new airline which will emerge after the cost cuts could break even by 2018.

The “flagship” route between London and Kuala Lumpur would be retained and continue to be operated by its remaining A380s.

Mueller declined to comment on speculation that MAS will get a new name, a new logo and change its MH flight code.

But he conceded that consumers will continue to associate Malaysia Airlines with the 2014 disasters.

Flight MH370 disappeared in the Indian Ocean with the loss of 239 lives and then another flight, MH17, was shot down over Ukraine.

Mueller said that the new company will be like a "start-up".

"I'm hired to run the new company entirely on commercial terms and there's very little margin for error," he told Reuters.

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