KUALA LUMPUR, Malaysia (AP) – Malaysia Airlines is out of intensive care. Now it’s working on long-term rehabilitation.
Two years ago this week, disaster struck when Flight 370 vanished, leaving the company reeling from a crisis magnified months later by the downing of a second Boeing 777 over Ukraine.
Shunned by travelers and already ailing from years of mismanagement that saddled it with at least $1.7 billion in losses since 2011, the Southeast Asian airline teetered on the edge of bankruptcy, forcing its government owners to carry out radical restructuring.
New CEO Christoph Mueller, a turnaround veteran, has been scaling back or cutting unprofitable routes, grounding jets and axing 6,000 workers from a bloated workforce as part of a $1.7 billion overhaul aimed at returning the carrier to profitability as early as next year.
Analysts say, however, the strategy of shrinking to survive makes Malaysia vulnerable to fierce competition from the budget carriers proliferating to serve Asia’s booming, travel-hungry middle class consumers. Competitors include homegrown rival Malaysia AirAsia as well as Indonesia’s Lion Air, Singapore’s Tigerair and Scoot and Qantas offshoot Jetstar.