Malaysia Airlines sends out termination letters to 20,000 staff

Malaysia Airlines employees by the check-in counter at Kuala Lumpur International Airport in Sepang, Malaysia on Jul 19, 2014. (Photo: AP/Joshua Paul)

KUALA LUMPUR: Termination letters from Malaysia's loss-making national carrier Malaysia Airlines (MAS) are expected to begin arriving at the homes of around 20,000 staff from Monday (Jun 1) onwards.

As part of its restructure, MAS is letting go all of its staff - but two-thirds are expected to receive offer letters to the airline's new incarnation, set to begin operations in September.

Sources tell Channel NewsAsia that some staff have already received their termination and offer letters, but not all have been offered the same position that they held previously in the company.

This overhaul of MAS comes as new CEO Christoph Mueller attempts to bring the airline back to profitability within three years. The company has suffered continuous losses since 2008 despite restructuring plans and billions of dollars worth of lifelines from the government.

MAS' image was also hit after the MH17 and MH370 aviation tragedies in 2014.

As part of this latest restructure, Malaysia Airlines has been selling off assets including its stake in travel distributor Abacus. It is also downsizing its fleet and is expected to slash routes in a bid to rein in costs.

"TOP-SCALE" COMPENSATION PACKAGE

But the planned reduction of human capital has hit company morale, with some telling Channel NewsAsia it felt as if their lives were "hanging by a string". Still, Maybank Research aviation analyst says MAS staff who face termination are getting a better deal than most.

"They don't really have basis to complain because other companies that have done retrenchment, like banks and telecommunication companies, the level of compensation that they provide is so much less than what Malaysia Airlines employees are getting right now," said Mohsin Aziz.

"The full one-and-a-half months salary for every year of service, that's already top-scale," he said. "And in addition they get medical insurance, coverage, benefits and all the perks for one year."

He added: "And thirdly, a three-month grace period before they're being let go even those who are not surviving will be able to stay until Aug 31 to do a proper handover and farewell."

Mr Mohsin is optimistic about the let-go staff's job prospects, saying they are highly-trained and would be "valuable to any organisation around the world".