Troubled Asian national carrier Malaysia Airlines will be completely revamped as a business through the remainder of the year as its new boss takes drastic action to return the loss-making operator to profitability. Christoph Mueller, who recently joined as chief executive officer from Aer Lingus has played important roles in the restructuring the Irish carrier and other European flag carriers.
The state-run airline’s sole shareholder, Khazanah Nasional Berhad, has this week appointed an Administrator to facilitate the transfer of selected assets and liabilities from the existing Malaysian Airline System Berhad to new company Malaysia Airlines Berhad. The current business will continue to operate through to August 31, 2015, with the new operator, effectively a start-up, taking to the air from September 1, 2015.
The voluntary administration follows the passing of a special Malaysia Airlines administration act by both houses of the Malaysian Parliament last year to provide for “an effective, efficient and seamless means to transition the business, property, rights, liabilities and affairs”.
The transition of the business is a key component of the 12-point MAS Recovery Plan, which was announced on in August last year to restructure the national carrier and set it on a path towards sustainable profitability. The process also includes conditional investment funding by Khazanah of up to RM6 billion ($1.66 billion), disbursed on a staggered basis and subject to the fullfillment of strict conditions.
Christoph Mueller, Chief Executive Officer Designate of the new airline, said: “This appointment does not affect our daily operations or existing reservations. All Malaysia Airlines flights, schedules, and reservations continue to operate as normal. I assure you our operations are very much business as usual.”
The ‘new’ Malaysia Airlines is expected to operate under a new brand and livery and there are certain to be changes to its network and fleet strategies, including the departure of some, if not all, the Airbus A380s in its fleet and which are used on its routes to London and Paris from Kuala Lumpur.
In this first official interview since taking over at Malaysia Airlines on May 1, 2015, Mueller has outlined more details of his management brief to Reuters. He said the ‘new’ Malaysia Airlines will operate like a “start-up” and would not be “a continuation of the old company in a new disguise,” but that “everything is new”.
"I'm hired to run the new company entirely on commercial terms and there's very little margin for error," he told Reuters in this week’s interview in the downtown Kuala Lumpur office of Malaysian state investor Khazanah. The airline is expected to cut its 20,000 workforce by around a third through the switch of airlines, with all those keeping employment with the state-run business doing so on revised contracts.
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