Malaysia Airlines has confirmed it will make 6,000 job cuts part of a recovery plan announced today.
This represents nearly 30% of its 19,500-strong workforce.
Khazanah Nasional, the state investment company that owns a 69% stake in the airline, will assume 100% ownership.
A new chief executive will be put in place and some long haul routes will be axed.
The airline, which last reported a profit in 2010, aims to return to profitability by 2018.
“The combination of measures announced today will enable our national airline to be revived,” said Khazanah’s managing director Azman Mokhtar.
Announcing its second quarter results yesterday, Malaysia Airlines warned of further losses in the second half of the year because of the recent tragedies that hit the airline.
It reported a net loss of 307m Malaysian ringgit (£58.7m) for the three months to June and confirmed that it has seen a ‘sharp decline’ in bookings since the disappearance of flight MH370 and the shooting-down of flight MH17 in the Ukraine.
Chief executive Ahmad Jauhari Yahya said: “We expected the impact of MH370 on the performance in quarter two. Given that, our team put in much hard work and effort to regain market confidence and rebuild sales.
“Tragically, just as we were beginning to see signs of recovery in all regions, we were dealt the blow of MH17.”
Immediately after the MH17 incident, average weekly bookings declined 33% and numerous flights were cancelled.
But Yahya said the full financial impact is expected to hit in the second half of the year.
In March, Malaysia Airlines Flight MH370 disappeared with 239 people aboard en route from Kuala Lumpur to Beijing.
Last month, Flight MH17 was shot down over Ukraine killing all 298 on board.
