Malaysia Airlines' new CEO has a big challenge

The newly appointed chief executive of loss-making Malaysia Airlines said on Monday that the carrier is "technically bankrupt", as he announced plans for a restructuring that will cut the company's workforce by a third.

"We are technically bankrupt...the decline of performance started long before the tragic events of 2014," Christoph Mueller said, speaking at a news conference.

Already squeezed into years of losses by stiff regional competition, the carrier was seriously affected last year by the loss of two jets in separate disasters.

MH 370 disappeared shortly after takeoff. The aircraft still hasn't been found. The official verdict on the jet's fate is that it was disabled or that the pilots and passengers were incapacitated. It then flew on until it ran out of fuel and crash in the Indian Ocean.

It is however possible that the aircraft was diverted from its course to some nefarious end, then crashed in the ocean.

MH 17 was lost while flying over Ukraine. The main theory regarding the plane's demise is that it was shot down by a military missile.

Commercial airline crashes have become increasingly rare, so it's doubly tragic thaty Malaysia Airlines endured two in relatively quick succession. Airlines can face bankruptcy at any time, given the difficult economics and very competitive nature of the industry.

Mueller's challenge is extraordinary, however.

Mueller was making his first public appearance as CEO since being hired last month by the carrier's owner, Malaysian state fund Khazanah, to lead the restructuring. The airline on Monday confirmed previously disclosed plans to cut 6,000 jobs, shrinking its workforce to 14,000.

(Reporting by Al-Zaquan Amer Hamzah; Writing by Praveen Menon; Editing by Kenneth Maxwell)