Malaysia Airlines' shareholders today voted to approve a takeover bid by Khazanah Nasional, paving the way for the nationalisation of the airline.
However, the proposal still needs to be vetted by the High Court of Malaysia before the buyout can proceed.
The move comes as part of an upcoming dramatic restructure of MAS including a 30% cut to its workforce – representing 6,000 workers – in a drive to return the airline to profitability by 2017.
Cuts to international routes are on the cards, with MAS rationalising its network towards a regional focus while relying on partners, including fellow members of Oneworld, for connections further afield.
The carrier will now focus on its local Asian routes and rely on its Oneworld partners to fly passengers in from Europe and elsewhere.
Once the transaction takes place, MAS will also disappear from Malaysia's stock exchange, with the company being delisted by the end of 2014 if the motion receives High Court approval.
The 'new MAS' will receive A$2 billion from 2014 to 2016 for the ambitious transformation.
The overhaul follows a A$104.3 million quarterly loss posted by the airline earlier this year.
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The proposal could also see Malaysia Airlines rebranded to help rebuild public confidence.
MAS' state-run parent Khazanah Nasional already holds 69.4% of the airline, and will buy the remaining 30.6% of shares for an estimated $470 million in an effective state take-over.
The airline would then be radically restructured to improve cash flow.
"We reiterate that the proposed restructuring will critically require all parties to work closely together to undertake what will be a complete overhaul of the national carrier on all relevant aspects," Khazanah said in a statement.
"Nothing less will be required in order to revive our national airline to be profitable as a commercial entity and to serve its function as a critical national development entity."
Malaysia Airlines was in dire financial straits before the loss of flights MH370 and MH17.
The airline has racked up debts approaching $1.5 billion since 2011 and earlier this year analysts were not expecting Malaysia Airlines to break even until 2016.
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