Malaysia Airlines 'Technically Bankrupt,' To Cut Jobs And Routes To 'Stop The Bleeding'

malaysia airlines (2) — Malaysia Airlines, reeling under last year’s twin air disasters that forced its nationalization, is “technically bankrupt,” the newly-appointed CEO of the beleaguered carrier said on Monday. In this photo, a man sleeps under graffiti depicting the missing Malaysia Airlines flight MH370 on the one year anniversary of its disappearance in Kuala Lumpur, March 8, 2015. Reuters/Olivia Harris

Malaysia Airlines, reeling from last year’s twin aviation disasters that forced it to be acquired by the country's government, is “technically bankrupt,” the newly appointed CEO of the beleaguered carrier said Monday. The airline also reportedly plans to lay off thousands of employees and significantly restructure its long-haul flight routes.

Christoph Mueller, who earned the nickname “The Terminator” because of the harsh restructuring measures he employed at Ireland’s Aer Lingus and Belgium’s Sabena, also announced a wide-ranging “hard reset” in the way Malaysia Airlines is run. As part of this plan, he will oversee the sale of two of the airline's six Airbus A380 aircraft, according to media reports.

“We are technically bankrupt and that decline of performance started long before the tragic events of 2014,” Mueller reportedly said during a press conference Monday, adding that the airline had “offered jobs” to 14,000 of its existing 20,000 employees. The moves were necessary to “stop the bleeding,” he said.

“We will embark on a second round in two weeks' time and that will allow others to accept our offers and that may change the numbers,” he added.

After years of losses, the airline is struggling to recover from last year’s disasters. Flight MH370, with 239 people on board, disappeared in March last year, triggering an ongoing search that has so far cost millions of dollars. And, in July, Flight MH17 -- carrying 298 people -- was shot down over rebel-held territory in eastern Ukraine.

Malaysian state fund Khazanah Nasional, which was previously the majority owner, took the airline private last year as part of a $1.63 billion restructuring plan aimed at returning it to profit within the next three years. As part of this restructuring process, Malaysia Airlines will also review its fleet of Boeing jets it uses on some long-haul routes, Mueller reportedly said. However, he added, the rest of its fleet would remain intact.

Despite changes to the frequency and fleets on certain routes, “we will remain a full service international carrier connecting continents,” Mueller reportedly said.

Ukraine