Tuesday 19 September 2017

Malaysia Airlines boss revelling in the road less travelled

The former Ryanair executive is enjoying the challenge in a sunnier version of Ireland, he tells John Mulligan

Malaysia Airlines ceo Peter Bellew
Malaysia Airlines ceo Peter Bellew
John Mulligan

John Mulligan

Peter Bellew has gone native. "It's like Kerry in the sun, with spicy food," says the Malaysia Airlines boss of his new home in Asia. The embattled carrier had been headed by former Aer Lingus chief executive Christoph Mueller until last year. With Bellew as his lieutenant, they were charged with steering the airline away from a trajectory that would have seen it collapse.

Bellew, who hails from Bettystown in Co Meath, was living with his family in Kerry before he decided to bail out from Ryanair, where he was director of flight operations and had also worked on its sales and marketing side. They all upped sticks for Kuala Lumpur, where Bellew has become embedded in the local culture.

"They're very like Irish people, Malaysians," he says. "There's the same sense of village life and community. It's very easy for Irish people to have a life over there."

But overshadowing the Asian adventure for Bellew, has been the task at hand - unpleasant and invigorating all at once.

There's also the reality that if he fails, the local witch-hunt would quite likely be vicious: imagine the field day politicians and media would have with a national, government-owned carrier collapsing in the hands of a foreigner. Mueller, a German, had a taste of that when as CEO of Belgian carrier Sabena, the airline folded just weeks after 9/11.

Bellew concedes that the job of turning Malaysia Airlines around has been far more challenging than he ever anticipated.

The carrier teetered on a financial precipice following the double disasters of flight MH370, which disappeared over the South China Sea in 2014, and downing of another jet by a Russian missile over Ukraine just months later.

"It was tougher than I thought," says Bellew (52), who took on the CEO role last July. "Ticket sales were quite low and there was a huge debate over whether we should change the brand, the logo - the name even. A whole lot of ponytails had presented various derivations of the name, the country and different swooshes and slashes.

"But the day I got the job, I decided we didn't have any time for that," he adds, speaking at a hotel outside Dublin where he's sporting a Malaysia Airlines tie and lapel badge to reinforce his loyalty to the carrier.

"I just needed to sell a lot of tickets very quickly," he says. "We effectively relaunched the airline five weeks later with the biggest advertising campaign it has ever had. We went with a very retro, 1980s-style advertising campaign. I didn't think it would have the impact it did. Everyone was telling me the brand was too challenged.

"The agency even advised us not to have the logo too big, and not to have cabin crew in uniform because people might be frightened and recall the tragedies."

The response to the ticket sale was so strong that the airline's website crashed temporarily - three times.

Of course, any airline can sell tickets at a knock-down price and get people to fly. It's making money that's the Holy Grail. With its recent past, the fear was that even cheap tickets might not be enough to get people into the air with Malaysia Airlines.

Its Kuala Lumpur-London service, for instance, was one that was in particularly dire straits. That was a result of the wrong aircraft type - a huge Airbus A380 - and not enough passengers to fill them.

Malaysia Airlines operates four of those behemoths on the route. Each aircraft, laid out by the airline to carry 494 passengers, was just more than 40pc full. That's not a load factor you can have for any length of time without haemorrhaging cash but that's exactly what the service was doing.

"You could be losing $1m a week with that kind of load factor on those four A380s," says Bellew.

But the seat sale helped to drastically improve things, even if it was just a plaster for a wound that's getting further attention. The load factor on the route is now more than 80pc.

But apart from just filling seats, the ticket sale answered that fundamental question for Bellew and his team: would people fly with Malaysia Airlines despite its troubled track record?

"It answered that question that was out there about the brand. There's nothing wrong with it and we don't need to be afraid any more to go out and publicise the company," he says. "We should be proud of it again. We're rebuilding credibility.

"We started seeing very high load factors. Last December, we had 90pc - that was the highest in the world that month of any full-service carrier.

"We carried half a million more passengers last December compared to December 2015, but we had 12 fewer aircraft operating."

Now, talk at Malaysia Airlines is about growth again.

Bellew has even talked about leasing A330 jets currently used by Alitalia if the Italian carrier collapses.

Malaysia Airlines has also hammered out a deal that saw passenger charges cut by 11pc at the Kuala Lumpur terminal it uses on most Asian and domestic routes.

"It's had a significant impact on our business out of Kuala Lumpur," says Bellew.

He has also rebuilt relationships with domestic and foreign travel agents - an important cog for an airline that lures many international travellers jetting to far-flung destinations on holiday.

And the improved confidence in the airline has also transcended the domestic market, insists Bellew.

Its appeal - boosted of course in recent months by those seat sales - has seen Malaysia Airlines boast its strongest booking numbers in 11 years from Ireland. Up to 100 Irish passengers per day, connecting in London, are flying with it to destinations including Australia, Thailand, and "obscure" places in China, says Bellew.

While the throttle is pushed up, the clear blue sky is still a way off.

The legacy of Malaysia Airlines' $1.5bn restructuring has been painful. In 2015, it was "technically bankrupt", according to Christoph Mueller (who's now working with Emirates as a possible CEO apparent), and it continued to rack up losses. Of its 20,000 workforce, 6,000 were culled and there was local bitterness that foreigners had been the ones doing the firing.

"It's hard for them to have a foreigner running the airline," admits Bellew. "It's hard for the whole country in a way. I've had to adjust as well. A lot of people will never get over it.

"If there was a Malaysian running Aer Lingus 20 years ago it wouldn't have gone down well (even Mueller's appointment as Aer Lingus CEO in 2009 was a tense affair). But a lot of people have accepted me.

"It's not easy," he says. "You do feel the weight of people's expectations on your shoulders, but that's a good thing. It makes you get your arse out of bed in the morning and work your hardest," he adds.

Meanwhile, the airline will be hiring staff as it replaces some narrowbody jets with larger ones. The superjumbo A380s will be spun off into a new entity that will specialise in religious and holiday charters.

Bellew is targeting a full-year profit next year and still insists he'll be headed for the exit after the airline refloats on stock exchange in 2019 (it was renationalised in 2014 as part of its rescue plan).

"It will need some continuity after that, but there are plenty of people in the organisation at the moment who'd be well able to run it," he says.

Guitar-playing Bellew has meanwhile immersed himself in Malaysian culture.

"I never worked outside Europe before," he says. "I'm surprised how comfortable I feel working with all the different languages, traditions and cultures. It's probably the life for me.

"At this stage in life you're normally worried about your golf handicap or the index-linking of your pension.

"It's been a kick in the arse for me. When we were young, my folks, and my mam in particular, always encouraged us to take the road less travelled. This certainly has not been the easy option."

xxxxxxxxxxxxxxxxxxxxx

Indo Business

Also in Business