Malaysia Airlines’ chief executive Christoph Mueller claimed the carrier was ‘technically bankrupt’ as he confirmed this week that the airline has axed 6,000 jobs.
As expected, he said only 14,000 of the existing 20,000 staff have been offered new jobs with the airline which is undergoing a major restructure and a rebrand designed to shake off the damage done by the loss of two aircraft last year.
In March last year, a flight disappeared without trace en route to Beijing, and five months later a second aircraft was shot down over Ukraine.
Speaking at the first news conference since his appointment in May, Mueller said: "We are technically bankrupt. The decline of performance started long before the tragic events of 2014."
However, city analyst Ken Odeluga of cityindex.co.uk said the airline’s balance sheet was ‘remarkably clean’ with about $180 million of accumulated losses, including $75 million of hedge accounting.
"Aside from that, there is no other red ink at all—no significant impairments or other risky effects," said Odeluga.
"The burdens that exist are of course not inconsiderable, but the point is, the airline has been carrying them for longer than its crisis has been going on.
"Its bigger problems involve the significant depreciation in the ringgit against the dollar that continues to shave off its room to manoeuvre, not to mention political interference, powerful unions, and more than a whiff of alleged corruption."
He said there was a ‘moderate possibility’ the airline would not be declared bankrupt.
