Some 3,500 Malaysia Airlines employees are expected to accept layoffs in the first round of a scheme to slash its workforce and return the carrier to profitability, a report said today.

Under the turnaround plan announced in March after posting a US$350 million annual loss, the airline will shed some 6,500 of its 23,000 employees and reduce its fleet from 40 to 21 aircraft.

Malaysian Airline System Employees Union secretary-general Ab Malek Ariff told the New Straits Times that 3,500 staff were initially expected to opt for retrenchment, lured by the prospect of "windfall" payments under the scheme.

However, he said the union has yet to receive details of the scheme which will be offered across the board except for pilots and engineering staff, as the airline is still awaiting approval from the government.

"The airline will have to give us a good package if it wants employees to leave voluntarily. For now, we have yet to receive any details, but we expect the government to make an announcement on this within one to two weeks," he said.

Remain competitive

Malek said the union was in favour of the voluntary separation scheme, which addresses what critics say is a bloated and unproductive workforce at the national carrier.

"I think MAS is moving in the first direction in trimming down the workforce in order to remain competitive," he said.

Under the rationalisation plan, Malaysia Airlines will surrender all but 19 major domestic routes to lowcost carrier AirAsia, which will take over the remaining 96 routes from August.

AirAsia, the region's biggest no-frills airline, has been pushing for access to domestic routes, saying it can succeed where the national carrier has failed and wring profits from services to rural and small-town destinations.