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Auf Wiedersehen, Mueller!

20 April 2016

MAS LGK

Passengers leaving a MAS B737-800 Pic/Shukor Yusof

In an interview with Malaysia’s New Straits Times on 2 March 2016 (Getting the basics right), Malaysia Airlines Berhad (MAB) CEO Christoph Mueller professed that the restructuring of the airline was more difficult and likely to take longer (than he or anyone anticipated) because the carrier had embarked on wrong strategies and poor execution.

He stressed: “We need to get the basics right.” Yesterday, seven weeks after making those remarks, Herr Mueller threw in the towel. He is leaving, he says, due to “personal reasons beyond my control”. We aren’t quite sure what his “personal reasons” are, but suffice to say he is constrained by these “personal reasons” that he must have felt he couldn’t achieve anymore than what he’s already done to turn the carrier around.

Mueller officially started work on 1 May 2015. He had immersed himself inside the airline as early as January 2015, meeting staff and learning more about the company and what ails it. Now, not even halfway into his three-year contract, the CEO has quit. And to think this was the man the Malaysian media and Khazanah Nasional (MAB’s sole shareholder) touted as the best person to help the airline. Khazanah’s MD said emphatically of Mueller: “Christoph is the best candidate…” and this local newspaper trumpeted Mueller’s appointment as “German precision…”

Mueller’s departure – for whatever reason – makes a mockery of Malaysia Airlines and its restructuring. It is utterly disgraceful. So the best candidate is now no more. What now? Go for second best? Who is second best, or third best, after Mueller?

One of Mueller’s tasks, according to the Khazanah MD, was to groom a local successor. It does not appear Mueller has done that – if he had, then Peter Bellew wouldn’t be acting boss now…

Mueller was described by many as a man who had nerves of steel and with turnaround skills that were second to none. John Strickland, a renowned analyst and aviation consultant had this to say of Mueller: “He’s got really superb real-world experience facing and overcoming challenges”. (Man who can save Malaysia Airlines) Alas, whatever Mueller’s facing personally now appears to be harder for the former soldier to surmount and overcome.

We have been inundated with many queries since Mueller’s resignation was made public on how his exit might affect MAB’s restructuring and if it could alter the dynamics of the company’s transformation in terms of morale, for example. In our view, the restructuring will continue as planned given that Khazanah has already clearly and categorically outlined its targets (Rebuilding a National Icon-The MAS Recovery Plan). Whoever replaces Mueller will continue with the mission, irrespective of whether the mission has merits.

As for morale, it would appear employees have been demoralized well before the tragic events of MH370 and MH17. The loss of those aircraft only served to further dampened their spirits.

The point is, the next MAB boss (he or she will be the seventh CEO in the past 14 years) will have to execute the rebuilding of the airline according to how Khazanah sees fit i.e. implement the measures in the Recovery Plan.

Could someone be tempted to walk into the cesspool? Why not, if the money’s right. It’s no secret that to entice anyone to run MAB, one would need to pay a premium… Mueller was paid some EUR1.5 million (MYR6.6 million) in his final year at Aer Lingus. It’s a safe bet that he wouldn’t have left Dublin for Kuala Lumpur and risk his reputation if the money wasn’t worth it.

According to the Recovery Plan, the new airline is expected to be profitable by end-2017; Mueller is aiming for breakeven in 2018 and said his “biggest problem is that the day has only 24 hours and the week has only seven days.” (see here)

Be that as it may, the saga continues at Malaysia Airlines. For Herr Mueller, we wish him all the best and may he enjoy the fruits of his labour. To paraphrase Mueller’s sign-off in his memo to MAB staff dated 19 April, “the show (wayang?) must go on!”

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