Malaysia Airlines to Keep Cutting Staff

Money-losing Malaysia Airlines will push ahead with its plans to cut its work force even though the number of employees accepting severance packages was less than it had hoped, a minister said Tuesday.

As a part of plan to return the airline to profitability by 2007, the carrier offered severance packages to more than 18,000 workers, hoping to attract 6,500 takers. But only 4,500 signed up when the deadline closed on June 7, said Transport Minister Chan Kong Choy.

"Though the scheme failed to attract the targeted number of employees, the (scheme) will be continued as it did not affect (the airline's) business revitalization plans," Chan was quoted by national news agency Bernama as saying in parliament.

He said 1,171 staff are due to retire this year while the services of another 2,761 contract employees will be terminated in the next three to five years.

The national carrier is struggling to revamp its operations as part of efforts to cut losses. Last month, it reported a loss of 321 million ringgit (US$89 million; euro74 million) in the first quarter to March, pulled down by higher fuel costs.

Apart from the staff layoff, Malaysia Airlines also planned to give up its near-monopoly on money-losing domestic routes and sell its headquarters as part of its business revamp.

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