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Malaysia Airlines Is 'Technically Bankrupt' After the Dual Disasters of 2014

The tragedies of 2014 include the disappearance of flight 370 in March and the shooting down of flight MH17 in July, which killed 537 people in total. Malaysia Airlines will now cut 6,000 jobs.
Photo by Ahmad Yusni/EPA

Following two major tragedies last year, Malaysia Airlines is "technically bankrupt," according to the company's new CEO.

On March 8, 2014, the southeastern Asian airline hit international headlines after flight 370 went missing between Kuala Lumpur and Beijing with 239 people on board. Search operations are ongoing, but no trace of the plane has yet been found.

Just 131 days later — on July 17 — flight MH17 crashed in Ukraine's conflict zone while travelling from Amsterdam to Kuala Lumpur. A report later found that it had been hit by a "large number of high-energy objects" that "pierced the plane at high speed," killing all 298 people on board.

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The Ukrainian government and its western allies claim there is strong evidence that pro-Russia rebels in the region brought down the plane with a Buk anti-aircraft missile.

Speaking on Monday, CEO Christoph Mueller said that the airline would need to cut 6,000 of its 20,000 staff to stay solvent, while two A380 super jumbo jets would also be sold.

Another 14,000 employees will keep their jobs, but under a new company that will take over the airline's business.

Related: Flight MH17 Broke Apart When Hit by High-Energy Objects, Report on Ukraine Crash Finds

Malaysia Airlines is currently being kept afloat by an injection of funds from a Malaysian government sovereign wealth fund. The country's parliament passed a law allowing the airline to be restructured under bankruptcy protection laws.

Mueller did not answer questions about whether the airline would adopt a new name or logo as part of a revamp of its brand. However, he did note that a clear problem for Malaysia Airlines is that the traveling public is regularly reminded of its association with tragedy, partly because the search for flight 370 is still underway.

In January, the Malaysian government finally declared the loss an "accident," while declaring that they believed no one on board had survived. The lack of information means that the disappearance continues to be discussed, however, and a bevy of conspiracy theories continue to arise.

Along with the cuts in staff and assets, a few international routes may be halted, Mueller said, but the airline's approach would mainly turn on flying smaller aircraft on routes that are currently unprofitable.

Related: Prominent HIV/AIDS Researchers Among Those Killed in Malaysia Airlines Crash

The Associated Press contributed to this report