Malaysia Airlines may be allowed to cut its workforce but only after holding discussions with its employees' union, a Bernama report said.

The government would allow the airline's new management to make the ultimate decision, Finance Ministry Parliamentary Secretary Hilmi Yahya was quoted as saying by the news agency.

New chief executive Idris Jala (left) is due to take over next month after troubled times at the airline.

Hilmi's remarks follow a report that Malaysia Airlines planned to slash the pay of its top managers from next month as part of cost-cutting measures following disappointing quarterly results.

Malaysia Airlines chairman Munir Majid declined to comment, saying an announcement, if any, "would be made at an appropriate time".

Source of concern

However, in an internal memo that was leaked to the media last week, Munir said the financial performance of the carrier - which has some 22,000 employees - was precarious and had become a source for concern.

"There is a need to extend the scope of the cost reduction focus and put in place more aggressive measures," he said.

The airline recently announced one of its worst ever quarterly losses at RM280.66 million (US$74 million) for the three months to June, after a profit of RM26.58 million a year earlier.

Malaysia Airlines has announced an ambitious five-year plan to boost profits by up to RM1.0 billion, which included a management shake-up.