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State investment fund Khazanah Nasional, which has taken control of the failing flag carrier, said it planned to pump 6 billion ringgit ($1.9 billion) into the airline, hoping the changes will return the company to profitability within three years.
Khazanah's Managing Director Azman Mokhtar said, however, there were no plans to change the carrier's name -- now deeply tarnished by its association with the MH370 and MH17 tragedies.
"The combination of measures announced today will enable our national airline to be revived," said Azman.
Aviation analysts, however, said it far too early to predict whether the scheme would work, citing a lack of detail, intense industry competition, and the airline's severely tarnished brand name.
Malaysia Airlines (MAS) has bled money for years through what analysts say has been poor management and a failure to rise to the challenge of intensifying competition.
But the sudden association with tragedy for an airline that previously had a solid safety record has pushed the 68-year-old company to the brink of collapse.
MH370 mysteriously vanished on March 8 with 239 passengers and crew aboard, while MH17 went down on July 18 -- believed hit by a surface-to-air missile -- over rebellion-torn eastern Ukraine, killing all 298 on the plane.
The restructuring plan will see about 6,000 -- or 30 percent -- of the airline's nearly 20,000 employees eventually lose their jobs to help put MAS on a "right footing in terms of staff size", Azman said.
He added man also said the airline would see a "rationalisation" of its flight network -- a term Malaysia Airlines has used previously for cutting unprofitable routes -- to become a "principally regionally focused" carrier. He gave no further details.
It also would pick a new CEO by the end of 2014, though current under-fire boss Ahmad Jauhari Yahya would stay in his position until July 2015 to ensure a smooth transition.
Azman added that "a sell-down, or partial sell-down, of Khazanah's stake to appropriate strategic buyers from the private sector will be considered" in the future, under the right conditions.
Khazanah Nasional, which already owns 70 percent of Malaysia Airlines announced plans in early August to acquire all remaining shares and de-list the company as it works to revive it.
Even before this year, aviation analysts have long said the airline needed deep cuts to staff levels and unprofitable long-haul routes, along with wholesale change to a management team that has made a series of poor business decisions over the years, to get on more solid footing.
Shukor Yusof, an analyst with Malaysia-based aviation consultancy Endau Analytics, said Friday's announcement amounted to a further government bailout of a failing company that had already been on life support for years through transfusions of public money.
"This is throwing good money after bad," said Shukor, who called the plans "piecemeal" and added that previous turnaround strategies under Khazanah have failed.
"Returning to profitability in three years is wishful thinking. Its brand is now severely damaged."
Adrian Ng, analyst with Kenanga Research, said the plan could work but that many more details were needed.
"How will they execute it? The industry is tough, and the competition is very stiff," he said.
AFP was not immediately able to reach MAS or union officials for comment.
On Thursday, MAS announced that it posted its sixth straight quarterly loss in the April-June period. It had already lost a combined $1.3 billion over the three previous calendar years before 2014.
It forecast more losses the rest of the year, saying the double disasters have caused a sharp drop in bookings.
MH370 inexplicably diverted from its Kuala Lumpur-Beijing course. The Malaysian government believes it went down in the southern Indian Ocean, but no trace has been found.
MH17 went down over a region of Ukraine held by pro-Russian rebels. Western leaders say it was shot down by the separatists but investigators have not been able to ascertain who was responsible.