Malaysia Airlines is freezing recruitment and considering axing more routes as part of cost-cutting measures triggered by rising fuel prices, a report said today.

"We are monitoring the overseas routes. If you reduce capacity, the routes' results actually improve," the airline's CEO Idris Jala said on the sidelines of an aviation conference in Istanbul.

"Routes that bleed cash, however, will be cut off," he said, according to the official Bernama news agency.

idris jala and malaysia airline Jala said that if the oil price had averaged US$80 a barrel during the first quarter - instead of an actual US$127 - the airline would have made RM600 million instead of RM120 million.

"It is the worst time for the airline industry. We are, however, cautiously optimistic," he said.

Malaysia Airlines in February had posted an all-time record profit of RM851 million for 2007, ending a series of disastrous losses.

The result was the culmination of a sweeping transformation plan, which saw the airline slash staff and routes and sell non-core assets after suffering losses of RM1.3 billion in the first nine months of 2005.

"We have already turned around the business, now we need to transform it as we cannot run the business in the same way under the current scenario," Jala said.

The national carrier will now freeze all discretionary expenditure such as office renovations, reduce the budget of every division by 10 percent, and halt recruitment, but a second round of redundancies is not in the offing.

"We are not doing it simply because I believe that it is important for us to consider the idea of profitable growth. When you grow, you may need the manpower," Jala said.

-AFP