Malaysia Airlines is "technically bankrupt."
That was the dramatic news delivered this morning by Christoph Mueller, the new CEO of the embattled carrier, who said the airline will still continue flying as it undergoes a financial and brand transformation.
Mueller confirmed that Malaysia Airlines has gone ahead and started the process of laying off 6,000 of its 20,000 workers.
"We are technically bankrupt," he told a news conference, "(but) the decline of performance started long before the tragic events of 2014."
Malaysia Airlines suffered two tragedies last year that hastened the carrier's financial fall. The airline was already three years in debt when Flight MH370 disappeared en route from Kuala Lumpur to Beijing in March of 2014 with 239 passengers and crew aboard. Not a single trace of the plane has been found in the 14 months since.
In July of 2014, Flight MH17 was shot down over disputed territory in Ukraine, killing all 298 people aboard.
The airline is looking to sell two of its six Airbus A380 long-haul routes and plans to eliminate some routes, but will keep the remainder of its fleet as it hopes to emerge in September with new branding.
Mueller told Reuters New Service the carrier will be called Malaysia Airlines Berhad as of Sept. 1, and will take on a structure similar to a start-up airline.
"It's not a continuation of the old company in a new disguise, everything is new," he told Reuters.
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