Outgoing Aer Lingus CEO and director, Christoph Mueller, has been chosen as designate chief executive officier of troubled Malaysia Airlines, the first non-Malaysian to hold this post.
Christoph Mueller, first foreigner to helm MAS. (Image credit: CAPA)
Malaysian sovereign investment fund Khazanah Nasional Berhad, which now controls the ailing airline, made the announcement on the evening of 5 December. Days earlier it had squashed specualtions of Mueller’s appointment dismissing the reports as ” speculative and premature.”
Mueller’s contract with Aer Lingus officially ends on 1 May, 2015. However Khazanah said his appointment as MAS CEO-designate and non-executive director will take effect on 1 January 2015.
“Discussions are on-going for Mueller to assume the post of MAS NewCo CEO at a date prior to 1 May 2015, but no earlier than 1 March 2015,” Khazanah said.
Current MAS CEO Ahmad Jauhari Yahya’s contract will expire on 19 September next year. He is helping MAS make the smooth transition to the NewCo.
Mueller, a German aviation veteran, will not have an easy task ahead. Apart from turning around the financially strapped airline to profitabilty, he also have to restore faith and belief in the carrier whose reputation took a battering after the twin disasters this year.
MAS reported huge losses of RM576.1 million (US$166 million) for its third quarter ended 30 September 2014, and stiff competition from low cost carriers is not making recovery any easier.
The task of rebuilding trust in MAS is also not smooth sailing with the loss of two aircraft in just a space of five months. MH370 with 239 people onboard mysteriously disappeared on 8 March while on a routine run from Kuala Lumpur to Beijing, and no trace of the B777 aircraft has been found till today. MH17 was shot down on 17 July over eastern Ukraine, killing all 298 aboard.
Regardless, Khazanah is confident the experienced Mueller could nurse the ailing MAS to good health. The choice was made only after an intensive global search by the board, which covered both international and local Malaysian talent.
New CEO, a NewCo, airline alliance – all aimed to put MAS back on stable ground. (Image credit: Malaysia Airlines).
Tan Sri Azman Mokhtar, Khazanah managing director, said in the statement: “The Khazanah board in its deliberations took into consideration the critical nature of the MAS restructuring, which requires absolutely the best aviation management expertise, and in particular, those with a strong track record of turning around national flag carriers.
“Christoph is the best candidate, and he has two equally important tasks: to lead the turnaround of our national carrier and to build local succession.”
Mueller brings more than 25 years of relevant experience in the aviation, logistics and tourism sectors to MAS.
Khazanah also stated that Mueller has a strong track record in helping turn around airlines, among which is the loss-making Aer Lingus. His work on turnarounds began from his time at Lufthansa. He then moved on to Sabena Group (part of the Swissair Group), DHL Express and global travel leisure group TUI AG.
“After the merger of the tourism activities of TUI AG with First Choice Holidays Plc into TUI Travel Plc, a FTSE 100 company, he took the role of executive director, aviation.
“He was responsible for a fleet of 160 aircraft operated by seven independent airlines in Europe and Morocco,” the statement said.
“In the last four-and-half years at Aer Lingus Mueller turned around the loss-making airline within a year, in a declining Irish market and tepid European market conditions.
“Aer Lingus’ sustainable profitability and cash generation are built on a new strategy and business model that has enabled the 78-year-old carrier to compete in a difficult market environment with both traditional legacy airlines and low-cost carriers.
“It has also developed Dublin to become one of the leading hubs for North Atlantic long-haul traffic,” added Khazanah.
As part of MAS restructuring plan 6,000 staff will be axed. (Image credit: Malaysia Airlines)
At the same time, Khazanah also announced new appointments in the NewCo, which will be operational by 1 July. Under the line-up of key leaderships, the current Celcom Axiata Bhd (one of Malaysia’s biggest telcos) CEO, Datuk Seri Shazalli Ramly, will be appointed as non-executive director, and Malaysia Airport Holdings Bhd advisor, Tan Sri Bashir Ahmad Abdul Majid, as chairman of the Corporate Reskilling Centre (CRC).
The CRC will start operations on 1 April, 2015. Together with the Outplacement Centre, it will re-train the estimated 6.000 MAS employees who are being laid-off as part of the RM6 billion restructuring plan to return MAS to profitability.
The statement said the appointments are part of efforts by the Malaysian government and Khazanah to lay strong foundations for the future success of the national carrier.
“They (appointments) are also key initiatives under the 12-point MAS Recovery Plan , which calls for the strengthening of the airline’s leadership as it transitions to MAS NewCo over the coming months to 1 July 2015.”
Commenting on the appointment, Prime Minister Datuk Seri Najib Razak said the government was committed to seeing through the complete overhaul of MAS to its successful conclusion,
“It is imperative that we have the best available talent with the expertise and experience to help drive the progress of the restructuring effort further forward, lead the airline to profitability, and groom a Malaysian successor to assume the leadership of the airline in the future.” he added.
