Malaysian Airlines (MAS) is to lay off just over 30 percent of its workforce in a restructuring that will see it brought under the full ownership of state-backed sovereign wealth fund Kazanah Nasional Berhad. Approximately 6,000 of the flagcarrier’s 19,500 workers will lose their jobs as part of a plan that will result in the removal of many long-haul routes from the network, with MAS focusing mainly on services within Asia. Kazanah is to inject approximately $1.9 billion in fresh capital to bolster the airline’s balance sheet.

The restructuring plan was announced in Kuala Lumpur on August 29 a day after MAS reported second quarter losses of Rm307 million ($97 million). Further losses are anticipated as the carrier seeks to recover from the loss of two of its Boeing 777s: MH370, which went missing in March en route to Beijing, and MH17, which is presumed to have been shot down over eastern Ukraine in July.

Kazanah’s goal is return MAS to profitability within three years of the airline’s delisting from the Malaysian stock market, which should be complete by year-end. By next July it intends to restructure the business as a new corporate entity called NewCo that will encompass all its existing assets, liabilities and operations. Chief executive Ahmad Jauhari Yahya is due to step down when NewCo is formed and Kazanah intends to announce his successor by year-end.