Loss-making national carrier Malaysia Airlines (MAS) will move out of its landmark headquarters in the capital, heightening speculation that it will sell the building, a report said today.

A memo issued by new managing director Idris Jala said the shift was aimed at "managing costs" and "streamlining operations," the New Straits Times reported.

Idris wants MAS operations to be concentrated in two main areas - Subang, just west of Kuala Lumpur and at Kuala Lumpur International Airport, south of the capital - it said.

A MAS official declined to comment on the report.

The bulk of the airline's staff numbering a few hundred in the 35-storey building in Kuala Lumpur's prime business area would move to Subang.

But the airline would continue to maintain its ticketing and other related services in the building, it said.

MAS staff would be moved in two phases, the first from this month to March and the next in June.

Under fire

Last month, the carrier came under fire from the Dewan Negara after it proposed to sell the building to raise funds and trim losses for the airline.

The national carrier ended 2005 in a troubled state after posting two consecutive quarters of losses and facing calls for costs to be slashed and better contingency plans made for rising fuel prices.

Last month, Prime Minsiter Abdullah Ahmad Badawi said the government was willing to extend loans to MAS to help it return to profitability, but ruled out a bail-out.

The government owns at least 69.3 percent of the airline through the state investment arm Khazanah Nasional. The government has bailed out the ailing airline in the past.

In 2001, following allegations of mismanagement, the government controversially bought then-chairman Tajudin Ramli's stake in the carrier for more than twice the market value, a move followed by a restructuring exercise.