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Overtime claims abuse, paid perks added to airline’s troubles: Malaysia Airlines CEO

KUALA LUMPUR — Various allowances, massive overtime claims abuse and over-priced contracts is why up to 8,000 Malaysia Airlines (MAS) employees will have to be retrenched on Monday (June 1), the company’s new chief executive Christoph Mueller said today (May 29).

KUALA LUMPUR — Various allowances, massive overtime claims abuse and over-priced contracts is why up to 8,000 Malaysia Airlines (MAS) employees will have to be retrenched on Monday (June 1), the company’s new chief executive Christoph Mueller said today (May 29).

In an interview with local daily The Star, Mr Mueller said that there has been a “bad practice” of the “abuse of overtime” claims in MAS, which had contributed to the company’s financial hardship.

“Overtime became, in certain areas of our company, a hidden currency for base pay substitution.

“That is just bad practice because it not only results in us paying an enormous amount of overtime, the aircraft also leaves the hangar late,” The Star quoted him as saying.

He added that frivolous allowances and the additional perks MAS employees are awarded had also pushed the company financially over the edge.

“In many airlines, it grows over the years. You have a flight into a cold area and there is a winter clothing allowance.

“It is not just the base salary you get, you have a lot of other things,” he said.

Mr Mueller said was now attempting to move MAS away from these bad practices by incentivising efficiency and productivity.

“We had the motivation to deliver our aircraft out of the hangar permanently late and it was kind of an incentive.

“We have to replace this type of bad practice with more flat salaries so we can incentivise people with more money if they finish the work on time, which I think is more normal,” he said.

He added that the new base salary will take into account the current cost of living in the various locations where MAS is based, including Malaysia, and also the seniority of an employee.

The Star also cited an anonymous source as saying that the salaries of several senior executives became a bone of contention among some unions as they claimed the senior members were earning over RM100,000 (S$36,953) monthly.

The Star reported on Monday that over 8,000 MAS workers were now at risk of termination as the airline may widen its job cull beyond the initially reported 6,000 that it previously said was needed to trim its headcount to a “sustainable” 14,000.

The employees will learn their fate on June 1, when every worker other than newly appointed Mueller will be terminated, before possibly being offered new employment with MAS’ new entity, Malaysia Airlines Bhd (MAB).

The national carrier was delisted in August after sovereign wealth fund Khazanah offered to buy out minority shareholders for a total of RM1.38 billion to restructure MAS, which suffered two air disasters this year.

The total takeover will cost Khazanah RM6 billion after the twin tragedies of MH370 and MH17 had threatened to overwhelm MAS’s finances.

The sovereign wealth fund later unveiled a 12-point turnaround plan for the national carrier, titled “Rebuilding A National Icon — The MAS Recovery Plan”, which includes transferring all MAS assets to the new entity. THE MALAY MAIL ONLINE

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