Malaysia Airlines will launch a RM600 million (US$166 million) scheme to lay off some 6,000 employees as part of a plan to haul the ailing carrier out of the red, a report said.

The Star newspaper said Malaysia Airlines will reduce its 23,000 workforce by a quarter under the voluntary separation scheme which is believed to be the largest ever announced in the country's corporate sector.

The airline will offer its staff, excluding contract workers and foreigners, one to three months' salary for every year of service with no cap on the number of years in employment.

Employees will have two weeks to make a decision and must leave the airline by July 31.

Under the turnaround plan, announced in March after the airline posted a RM1.3 billion annual loss for 2005, it will surrender all but 19 major domestic routes to lowcost carrier AirAsia.

In the black by 2007

The troubled carrier also plans to cut out unprofitable international routes and sell off its landmark headquarters in the heart of Kuala Lumpur.

Malaysia Airlines has blamed its losses on crippling fuel prices and lower load factors but hopes to be back in the black by 2007, and to achieve record profitability the year after.

A spokesman for Malaysia Airlines said details of the staff lay-off scheme would only be announced late today.