World

In memo to staff, new Malaysia Airlines CEO says finances worse, airline to shrink to survive.

The new CEO of Malaysia Airlines says its financial situation is more challenging than anticipated and it will shrink in size as it tries to overcome a tarnished image with the travel industry and the public.

Malaysia Airlines was battered last year by double jet disasters. Its government owner has brought in a new CEO, former Aer Lingus chief Christoph Mueller, to oversee a turnaround.

In a memo, Mueller thanks Malaysia Airlines staff for a warm welcome but also notes part of the organization seem "depressed" and customers are saying that service is deteriorating.

Malaysia Airlines is moving ahead with a previously announced overhaul that will involve cutting its staff by 6,000.