The decline in performance of Malaysia Airlines started long before the shocking and tragic events of 2014, which saw MH370 disappear without trace and MH17 shot down over Ukraine.
Christoph Mueller, the man who turned around Irish national carrier Aer Lingus, pulled no punches at a news conference, describing MAS as “technically bankrupt”. He announced plans for a restructuring that will cut the company’s workforce by a third.
“We are technically bankrupt…the decline of performance started long before the tragic events of 2014,” Mueller said.
Mueller made his first public appearance as MAS chief executive on Monday, having been hired last month by the carrier’s owner and sole shareholder, Malaysia’s sovereign fund, Khazanah, to lead the restructuring.
Mueller is chief executive of Malaysian Airline System Berhad (MAS) and chief executive-designate of the new airline, Malaysia Airlines Berhad (MAB).
The airline has confirmed previously disclosed plans to cut 6000 jobs, shrinking its workforce to 14,000.
The airline appointed an administrator a week ago. Quickly, Mueller assured customers that MAS operations would continue as normal during the transition.
Khazanah appointed Dato’ Mohammad Faiz Azmi as administrator for MAS.
The administrator is helping transfer selected assets and liabilities from MAS to the new company in a process that will continue until 1 September 2015. MAS will continue to operate throughout the period up to and including 31 August 2015, after which MAB will operate the business of the airline from 1 September 2015 onwards, an official statement said.
The transition from MAS to MAB is a key component of the 12-point MAS Recovery Plan announced on 29 August 2014. It aims to restructure the national carrier to set it on a path towards sustainable profitability. The plan also includes conditional investment funding by Khazanah of up to MYR 6 billion (about AUD 2.1 billion), though not all at once.
In an issued statement, Mueller said: “I assure you our operations are very much business as usual. All MAS flights, schedules, and reservations continue to operate as normal. We remain committed to serving you with our world-class Malaysian Hospitality, and look forward to welcoming you on board Malaysia Airlines.”
MAS plans to reduce overall capacity this year. The carrier has been trying to sell two of its A380s, Mueller confirmed, but would keep all its current types of aircraft including A330s, B777-200s and B737-800s.
Written by Peter Needham