MAS on cost-cutting drive

[MH23]

Malaysia Airlines is going on a cost-cutting drive from next month and this will see some senior staff taking a pay cut of up to 30 per cent.

Chairman Datuk Munir Majid will also waive his allowance as acting managing director for one month.

 

The new chief executive, Idris Jala, is due to take over next month.

 

In a memo to staff on Thursday, he said, "Our financial performance is precarious and has increasingly become a source for concern. There is now a need to extend the scope of the cost reduction focus and put in place more aggressive measures".

 

Among the radical measures to be taken are the deferment of non-critical investments and services, and a freeze on recruitment.

 

The airline posted a net loss of RM280.7 million in the first quarter ended June 30. After the loss, managing director Datuk Ahmad Fuaad Dahlan announced his retirement, barely a year into the job.

 

Munir then announced a five-year plan to boost the carrier's profit by up to a billion ringgit, including shaking up the management and restructuring the organisation.

 

The airline is likely to detail its new cost-saving programme when it releases its second-quarter results later this month.

 

In the note, Munir said the second-quarter results would not fully reflect the impact of existing company initiatives, including cutting its fuel bill by 10 per cent this fiscal year.

 

He said division heads reporting to the top management would take a voluntary pay cut of between 15 and 30 per cent from next month.

 

It is learnt that recruitment of staff has also been frozen, except for critical areas. Managers will have to justify why they need to increase the headcount.

 

"The management would also have to justify to the executive director how they will be spending the budget already approved for the year. All these measures are to reduce the operational expenditure," a source said.

 

A Malaysia Airlines spokesman downplayed the contents of the memo, saying it was a reminder to all employees on the cost-cutting measures already in place.

 

Quelle: New Straits Times