Malaysia Airlines To Lay Off 6,500 Staff

Malaysia Airlines to lay off 6,500 staff

Kuala Lumpur: -- Malaysia Airlines has announced it will lay off 6,500 workers and give up 96 domestic routes to budget airline AirAsia under a major restructuring plan, a statement said Tuesday.

The national carrier will also lose all government subsidies as of August 1, the prime minister's office said in a statement released late Monday.

The announcement came as part of Malaysia Airlines efforts to overcome huge losses, and shed its image as a government-subsidized, loss-making airline.

The carrier will now retain 19 domestic routes to share with AirAsia, Southeast Asia's first low-cost carrier, including flights to tourist destinations such as Penang, Langkawi, Kota Kinabalu, Kuching and state capitals.

Airline officials have said that many of the former Malaysia Airline staff will be absorbed by AirAsia.

Under the restructuring, "the government will not be giving any subsidy to Malaysia Airlines or AirAsia to operate the domestic sector," beginning August 1, the statement said.

Also, "the profit-and-loss account for domestic routes will be borne by Malaysia Airlines, not by the government," it said.

The government has been bearing an annual loss of about 300 million ringgit (81 million dollars) annually for the airline, which suffered 1.26 billion ringgit (340 million dollar) in losses from April to December last year.

--dpa 2006-03-28