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Malaysia Airlines to cut 6,000 staff in overhaul

By WTOP Staff

EILEEN NG
Associated Press

KUALA LUMPUR, Malaysia (AP) — Malaysia Airlines will cut 6,000 workers as part of a $1.9 billion overhaul announced Friday to revive its damaged brand after being hit by double passenger jet disasters.

The staff reduction represents about 30 percent of its current workforce of 20,000. A search for a new CEO is underway but there is no move to change the airline’s name, which some branding experts had said was necessary for a successful makeover.

Khazanah Nasional, the state investment company that owns 69 percent of the airline, said the overhaul includes the establishment of a new company that will take over the existing Malaysia Airlines business and its reduced staff.

The revamp and new investment in the carrier will cost about 6 billion Malaysian ringgit ($1.9 billion). Analysts say the substantial staff cuts suggest the airline will reduce flights to Europe and China.

The twin disasters and ongoing financial woes “created a perfect storm for the restructuring to take place,” said Khazanah Managing Director Azman Mokhtar. “We need to have a fresh start.”

The plan aims to “strike a balance between Malaysia’s desire to revive a national carrier against the prudent use of public funds,” he said.

The airline will be removed from the Malaysian stock exchange and taken completely under the wing of the government. Khazanah, which previously announced that it plans to take 100 percent ownership, aims to restore Malaysia Airlines to profitability by the end of 2017 and then relist its shares on the stock exchange by the end of 2019.

A substantial revamp has long been on the cards for Malaysia Airlines, which was struggling with chronic financial problems even before it was hit by the double disasters this year.

Investigators continue to scour the southern Indian Ocean for Malaysia Airlines Flight 370 which veered far of course while en route from Kuala Lumpur to Beijing on March 8 with 239 people on board. In July, 298 people were killed when Flight 17 was blasted out of the sky as it flew over an area of eastern Ukraine controlled by pro-Russian separatists.

The tragedies have scarred the airline’s brand, once associated with high-quality service. Travelers on recent long-haul flights have posted photos on social media of nearly empty cabins and departure lounges. The airline says passengers fell 11 percent in July from the year before.

Azman said Khazanah’s 6 billion ringgit investment “will not be a bailout” and that the investment company will get its money back if the airline follows strict conditions laid out under the 12-point plan restructuring plan.

Khazanah, which has previously pumped 7 billion ringgit into the airline, said it would consider selling all or some of its stake to “strategic buyers from the private sector” once the carrier returns to the stock market.

But after four previous restructuring in a dozen years, the latest plan was met with some skepticism by analysts.

“It’s like a fairy tale that you tell your baby to put him to sleep. It has a happy ending,” said Maybank analyst Mohshin Aziz.

He said said staff reductions were one of the restructuring plan’s key points because “that automatically tells you they’re going to cut their capacity by a similar quantity — one third — as well.”

Analysts have been predicting the airline will cut unprofitable routes to China and Western Europe, where many of the passengers in the two disasters were from.

Azman said Khazanah has recommended to the government that the Malaysia Airlines name remain unchanged. He also said there are no plans to sell its profitable maintenance arm.

In releasing its latest quarterly financial result, a loss, on Thursday, Malaysia Airlines said the worst financial impact from the disasters will come in the second half of this year.

Khazanah has begun a search for a new chief executive for the airline, which is likely to be completed by the end of this year.

Current CEO Ahmad Jauhari Yahya will continue to head Malaysia Airlines until its new incarnation is established in July next year.

___

Chan reported from Hong Kong.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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