As a senior flight attendant, Shashi Kumar prided himself on his training in fine dining, serving passengers in first and business classes on Malaysia Airlines. His salary was enough to offer his family a comfortable life, complete with swimming and taekwondo lessons for his kids – and help he was able to provide with his parents’ medical bills.
Then Kumar’s employer suffered twin tragedies in 2014: Malaysia Airlines Flight 370 seemingly disappeared into thin air over the Indian Ocean with 239 people on board, and Malaysia Airlines Flight 17 was shot down over Ukraine, killing all 298 people aboard.
In response to the turmoil over these disasters, the airline’s sole shareholder, Malaysia’s sovereign wealth fund, Khazanah Nasional Berhad, announced in 2015 that it was slashing one-third of the airline’s workforce. Malaysia Airlines was “technically bankrupt”, its CEO said at the time, and 6,000 workers permanently lost their jobs.
Kumar, then 43, was one of them. His family was forced to rely solely on his wife’s salary and money that Kumar made from odd jobs, he said. Once a member of the executive council of the National Union of Flight Attendants Malaysia (NUFAM), Kumar found less-skilled work for less pay, including a stint as a security guard.
Four years later, he still hasn’t found stable work – and he’s far from alone. Some ex-Malaysia Airlines employees have turned to selling street food or driving for ride-share services, he said.
“Until today, many of those people who have been retrenched are jobless or doing odd jobs like selling [the rice and coconut dish] nasi lemak, driving [for] Grab, or doing dispatch work,” Kumar told Al Jazeera.
‘No humanity’ in layoffs
Khazanah, which privatised Malaysia Airlines in December 2014, maintains that 99 percent of exiting employees who signed up with its Corporate Development Centre (CDC) for services including career profiling, job-seeking skills and placements have “successfully transitioned to new employment, self-employment or retirement,” Khazanah spokesman Mohd Raslan Md Sharif told Al Jazeera.
However, Kumar said that many of the jobs ex-Malaysia Airlines employees were offered in other government-linked companies fell below their previous skills or salary levels.
Worse still, some married couples had both spouses laid off from the airline, according to NUFAM president Ismail Nasaruddin.
“We said, ‘Don’t retrench couples,’ but they did. There was no humanity in how they handled that. When we asked [then] prime minister [Najib Razak] about it, he said that this was the best solution,” Nasaruddin told Al Jazeera. “‘The money is good, Ismail,’ he said.”
But the money – which included six billion Malaysian ringgits ($1.43bn) pumped into Malaysia Airlines by Khazanah, of which some 1.5 billion ringgits ($359m) was distributed among laid-off employees – failed to revive the struggling airline.
Meanwhile, Malaysia Airlines has continued to record losses every year since 2014 despite Khazanah having targeted a return to profitability by 2017. In 2018, impairments for the airline accounted for about half of Khazanah’s pretax loss of $1.5 billion.
Malaysia Airlines is late filing its 2018 figures (a Khazanah spokesman said they will be in by October), but aviation analyst Shukor Yusof, founder of Endau Analytics, estimates that Malaysia Airlines is losing about 3 million Malaysian ringgit or $730,000 per day this year.
The creation of a new legal entity to govern the airline under Khazanah’s 2014 recovery plan also appears to have prevented former employees from taking legal action against the previous company, Malaysia Airlines Systems Berhad, Nasaruddin said. Employees were told courts wouldn’t hear their cases “because the company no longer exists”, he explained.
Malaysia Airlines also shuttered all internal unions, which was met with strong protest from multiple human rights groups in Malaysia at the time. Kumar said new employees have told him they have also been discouraged from joining the national union.
“What I get from the basic training crew is that they were told not to go against or question the company – to follow orders,” Kumar said.
In place of internal unions, Khazanah notes that the airline currently practises “collaborative employee engagement” via its Works Council, which meets monthly.
Some former workers were offered contract positions after Malaysia Airlines found itself understaffed after the layoffs. But these new positions offered lower salaries and few, if any, of the benefits that workers had enjoyed as full-time employees, Nasaruddin said.
Malaysia Airlines management has submitted a long-term business plan to Khazanah, although neither party confirmed whether the plan had been accepted.
In response to Al Jazeera’s request for comment, Malaysia Airlines spokesperson Kharunnisak Dzun Nurin said the company wants to “build a diverse Asia Pacific network with a simplified fleet structure and operations to ensure consistency whilst removing complexity in service delivery”.
But aviation analyst Yusof is sceptical that the new long-term business plan will help the company recover.
“The stated break-even target [of] 2022 is pure fantasy. How can it break even in three years when debts for 2017 are around $1.7bn and other fixed costs remain constant?” he asked.
For its part, NUFAM alleges that the carrier’s financial woes are due to rampant mismanagement over the years – oversights that include having paid over $1 per stick of satay for in-flight meals (competing airlines charge $4 for five sticks of satay and rice) and purchasing tablet computers at more than three times their retail price.
Khazanah says that Malaysia Airlines has a whistle-blowing policy in place, and anyone with evidence of financial mismanagement should report it to the company or its directors.
“Any claims that financial mismanagement had occurred in the past are serious allegations that should be addressed appropriately. Khazanah will deal with any such evidence of mismanagement accordingly if raised to our attention,” Sharif said.
Nasaruddin, the union president, wants the board to be held accountable for Malaysia Airlines’ financial woes.
Yusof concurs that major changes are needed. “Unless the government has the political will to weed out the current management and board, and replace them with professional Malaysians with the skills and discipline to run the airline, Malaysia Airlines will continue to fail,” he said.
In July, Khazanah hired Morgan Stanley to explore strategic options for Malaysia Airlines in the hopes of reaching a deal by the end of this year, Bloomberg reported, citing sources familiar with the matter. It remains unclear whether Malaysia Airlines’ existing long-term business plan will factor into which potential buyers it considers.
Malaysia’s Prime Minister Mahathir Mohamad has emphasised his two priorities for potential investors: not to lay off any more workers, and to keep Malaysia in the airline’s name.
But even five years later, the twin tragedies of MH370 and MH17 are still at the forefront of public perception, and that remains a drag on the future of Malaysia Airlines.