Malaysia Airlines (MAS) is finalising the Voluntary Separation Scheme (VSS) for its staff and it is expected to be ready in a month's time, said Transport Minister Chan Kong Choy said today.

According to Bernama, he said the national carrier is currently working on the details to be included in the scheme.

Asked on the number of staff affected, he said: "We don't know yet."

The reduction of manpower is one of the strategies taken by MAS under its domestic rationalisation plan that was announced by the Prime Minister's Department in March this year.

It was also reported that about 6,500 MAS employees would be affected by the downsizing exercise.

Under the turnaround plan announced in March after posting a US$350 million annual loss, the airline will also reduce its fleet from 40 to 21 aircraft.

Right direction

Previously, Malaysian Airline System Employees Union secretary-general Ab Malek Ariff said some 3,500 employees are expected to accept layoffs in the first round of the scheme to return the debt-ridden carrier to profitability.

"The airline will have to give us a good package if it wants employees to leave voluntarily," he said.

Malek said the union was in favour of the VSS, which addressed what critics say is a bloated and unproductive workforce at the national carrier.

In another development, Citigroup Investment Research Asia Pacific said MAS' proposed mutual separation scheme will be a test case for the government, which ultimately will put pressure on other government-linked companies (GLCs) to follow suit.

"While the national airline's move would only bear fruit in the long term, it does signal that the long-awaited GLC reforms are finally making progress," it said in a research on Malaysia Strategy Equity.