SEPANG: The focus this year in Malaysia Airlines’ five-year turnaround plan will be to stabilise and salvage the national carrier from bleeding further losses.
“The patient is very ill,” Malaysia Airlines Bhd (MAB) group chief executive officer Christoph Mueller said in an exclusive interview with the New Straits Times.
The corporate restructuring specialist said Malaysia Airlines found itself in a crisis due to wrong strategies and poor execution.
“I believe that’s the reason why the restructuring of Malaysia Airlines is more difficult and will take longer,” said the German citizen, who was previously CEO of Aer Lingus, the national airline of Ireland.
Mueller, who assumed the top post of the national carrier on May 1 last year, said the workforce rationalisation in June last year was one of the key milestones in Malaysia Airlines’ restructuring.
“That was probably the most significant point in the first couple of months because it was clear that, as of that date, we had passed the point of no return,” he said in the hour-long interview at Malaysia Airlines’ corporate office here.
The national carrier trimmed its workforce from 20,000 to 14,000 ahead of the incorporation of MAB, the new company that was incorporated after the privatisation of Malaysian Airlines System Bhd (MAS).
Mueller, who turned around the loss-making Aer Lingus within a year, said Malaysia Airlines needed to address weaknesses in cost and revenue.
“We are too expensive everywhere. We have too many suppliers. When I arrived here, there were 20,000 suppliers. We need to reduce it by a factor of 10 to 2,000.”
Malaysia Airlines’ information technology capabilities — booking system and online offerings — are also lagging behind competitors and will be upgraded under the restructuring.
“We are in the last round of a tender process for a new passenger service system. There are not that many suppliers in the world because it’s a monumental IT system,” said Mueller, who has held senior positions at Lufthansa, Swissair Group, Delta Air Transport and DHL Express.
A decision is expected in four weeks and implementation will take about 18 months.
Mueller, who turns 55 this year and has a passion for flying and aircraft, said MAB was working to improve customer satisfaction, time performance and punctuality.
“We need to get the basics right,” said Mueller, who has a private pilot’s licence and had his first solo flight at the age of 15.
While acknowledging that turning around Malaysia Airlines would be tough, Mueller said he was convinced that the task was doable.
“Our business plan is not built on hope or wishful thinking. It’s all about facts. There are two factors which are out of our reach — the uncertainty in demand caused by the MH370 incident (and) the exchange rate of the ringgit to the US dollar. These are out of our hands. The rest is our making.” Additional reporting by Bilqis Bahari