Malaysia Airlines today said it would reduce flight frequencies and impose a hiring freeze as it resorts to a new round of cost-cuts and a fuel surcharge hike to battle soaring energy prices.

"The oil price is rising at levels never seen by mankind," the national carrier's managing director Idris Jala told reporters, adding that he may also cancel an option to purchase new aircraft.

idris jala and malaysia airline Idris said the airline would impose a "freeze on recruitment, defer spending, adjust fares and review routes and flights which are losing money," in a bid to maintain its profit forecast.

"We are reducing about six percent of our capacity," he said, adding that the airline would announce the new fuel surcharge on Friday.

"The focus is predominantly on cutting costs. I would not discount cutting routes if oil goes to US$200 a barrel," he said.

Airlines worldwide including Virgin Blue, Qantas Airways and US Airways have cut back their growth plans and axed loss-making routes to weather spiralling fuel prices.

Boeing option not exercised

Idris said that while the airline will pursue its firm plan to buy 35 narrow-body 737-800 aircraft from US-based Boeing as part of its fleet upgrading plan, it may not exercise the option to purchase another 20 aircraft.

"We may not even exercise the option. We will continue to treat it as an option," he said. The total cost of the 55 aircraft is 4.2 billion dollars at list prices.

Malaysia Airlines hopes to achieve record profits under its recovery plan after it broke back into the black last year.

It posted an all-time record profit of RM851 million for the 2007 financial year, ending a series of disastrous losses.

But in May it announced that its profits in the first quarter slipped 9.8 percent from a year earlier to RM120 million.

The carrier hopes to post between RM400 to RM1 billion profit this year.

The return to profits 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.