Malaysia Airlines has outlined plans for a major restructure that will see the carrier slash around 6,000 jobs as it struggles to stay in business.
The plan, released on Monday by email, said the airline would begin operations under a new brand on September 1.
About 14,000 of the roughly 20,000 existing employees are expected to receive offer letters to remain with the restructured airline, it said.
Malaysia’s national carrier is also expected to pull back drastically from unprofitable long-haul routes such as to Europe, and focus instead on regional traffic as it regroups.
The announcement marks the first concrete move by newly-appointed CEO Christoph Mueller as he seeks to repair the embattled airline’s reputation following the loss of two jets in separate disasters in 2014.
“We are technically bankrupt … the decline of performance started long before the tragic events of 2014,” Mr Mueller said, speaking at a news conference.
In March of last year, flight MH370 disappeared with 239 passengers and crew aboard and remains missing.
Four months later, flight MH17 was destroyed by a suspected ground-to-air missile over Ukraine.
The tragedies were the final straw for an airline that analysts say had already been poorly managed for years, slipping further into the red.
Mr Mueller was making his first public appearance as CEO since being hired last month by the carrier’s owner, Malaysian state fund Khazanah, to lead the restructuring.
The state investment fund said last year that around 6,000 jobs would be lost.
Monday’s announcement said the airline planned to “stop the bleeding” in 2015, stabilise next year, and seek to start growing again by 2017.
Analysts have long blamed the airline’s failure to compete on poor management, unwise business decisions, government meddling, and unfavourable service and supplier contracts stemming from Malaysia’s crony capitalism.
The blueprint called for the renegotiating or resetting of major contracts, and a major revitalisation of technology, training, and business operations.
Mr Mueller warned last month a major overhaul was necessary as the airline was weighed down by “uncompetitive cost levels” that he said were 20 per cent higher than its rivals.