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Last Updated: Monday, 27 February 2006, 12:31 GMT
Rescue plan for Malaysia Airlines
Aircraft from Malaysian Airlines and Malaysia's budget carrier Air Asia sit parked on the tarmac of Kuala Lumpur's International Airport
Malaysia Airlines has come under pressure from budget carriers
Malaysia Airlines has launched a rescue plan as it struggles to compete with low-cost Asian rivals.

Malaysia's national carrier is to increase fares, close unprofitable routes, cut costs by 20% and could sell its headquarters in Kuala Lumpur.

Malaysia Airlines said it needed to raise 4bn ringgit to stay afloat.

The reform plan came as it posted a net loss of 616m ringgit ($166m; 95m) for the three months to 31 December, its third consecutive quarter of losses.

"On current business assumptions, course and speed, we will surely fail unless we radically change the way we run our business," said managing director Idris Jala.

He said 66 of the airline's 114 international routes were unprofitable, while 114 out of 118 domestic routes made a loss.

A successful rescue plan would enable the airline to deliver a profit of 50m ringgit in 2007 and 500m ringgit by 2008, he said.


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