PETALING JAYA: Malaysia Airlines (MAS), which was hit by the disappearance of MH370 and the shooting down of MH17 in Ukraine on July 17, has embarked on a journey of renewal after a devastating 2014.
The national flag carrier is being revamped in earnest to overcome financial losses plaguing it for several consecutive years - even before the unprecedented incidents.
The loss of two aircraft, which has damaged its brand, was probably the last straw that accelerated the need to resuscitate the ailing airline.
Khazanah Nasional Bhd, MAS' largest shareholder with a stake of 69.3 per cent, proposed last August to undertake a selective capital reduction and repayment exercise. The company was subsequently taken private and delisted from Bursa Malaysia under a RM6bil restructuring effort aimed at returning it to profitability within three years.
MAS shares were suspended from trading from Dec 15, 2014. Last November, the sovereign wealth fund obtained minority shareholders' approval to take MAS private by paying 27 sen a share, totalling RM1.4bil(S$ 526 million), to buy out shares it did not own as part of its plan to rejuvenate the carrier.
Khazanah's intention was to take the company private and transfer the entire operations and assets into a new company.
Simultaneously, it is re-negotiating the contracts with employees and suppliers, reducing the workforce by some 6,000 people, from a total 20,000, and by July 1, a new MAS is expected to start operations.
It will also be moving from Subang Jaya to its new headquarters at KLIA, where at least 1,300 of its employees will be relocated to.
The Malaysian Airline System Bhd (Administration) Act 2014, which came into effect on Feb 20, will provide special laws for the administrator of MAS to carry out services that are essential for the continuity of the airline and its uninterrupted connectivity within Malaysia.
With work to turn around the carrier in progress, Khazanah has also appointed Christoph Mueller - the former head of Irish flag carrier Aer Lingus who boasts a proven track record in the airline business - as the new CEO to steer MAS out of turbulence. He reported for duty on Monday.
Immediately after the MH370 incident, MAS saw its sales fall sharply and its share price, which was still traded then, underwent selling pressure. The good news now is that MAS' load factor has since recovered to the pre-MH370 level and the airline's biggest cost item, which is fuel, has become much cheaper.
Based on analysts' estimates, with jet fuel pricing of RM274 a barrel, MAS can easily save RM2.4bil from its fuel bill.
MAS has been a fighter. All eyes will now be on its transformation journey. But its turnaround will take time.
Despite all this, MAS still holds a special connection for many Malaysians.