Saturday 17 August 2019

Bellew hit with back pay demand

The airline executive's return is crucial to Ryanair but has not gone down well in Malaysia, writes Fearghal O'Connor

Peter Bellew left Malaysia Airlines to take up a job with Ryanair. Photo: Bloomberg
Peter Bellew left Malaysia Airlines to take up a job with Ryanair. Photo: Bloomberg

Fearghal O'Connor

Ryanair's new incoming chief operating officer Peter Bellew must repay four months' salary to Malaysian Airlines (MAS), the deputy finance minister of Malaysia has demanded.

The minister told the country's parliament in recent days that Bellew's resignation last month - to return to his old employer in Ireland - was given without sufficient notice.

The hiring of Kerry-native Bellew is viewed as a crucial part of Ryanair's response to its recent spate of flight cancellations, as well as its ongoing industrial relations difficulties with pilots. But Bellew's sudden departure from the Malaysian carrier, which is owned by the Asian country's sovereign wealth fund, has sparked a major political backlash in that country.

The Kerryman has been leading MAS' ongoing recovery from two high-profile plane crashes - the mysterious disappearance of flight MH370 over the South China Sea in March 2014 and the shooting down of flight MH17 over Ukraine just four months later. Last month, Bellew announced that MAS was on track to return to profit in 2018 and on October 3rd he had was awarded Travel Personality of the Year at the TTG Travel Awards in Bangkok.

"These awards are huge milestones for us as we continue working hard to restore ourselves to our former glory," he said at the time.

Just over a week later Bellew tendered his resignation. In a statement released on his own behalf, the Kerryman said that his return to Ryanair was due to "love for country" and that he could not turn down a request to help the under-fire airline. "It is Ireland's greatest company. They need my help and there is a big challenge. It is a form of national service," he said in the statement.

But in a separate press statement the Asian airline noted the "unexpected" nature of Bellew's departure. "At a press conference with Malaysian and international media on 27 September 2017, Bellew had expressed his commitment to Malaysia Airlines when asked to comment on speculation that he would rejoin Ryanair," said the statement. "He said that he was happy to be in Malaysia and that the turnaround of Malaysia Airlines would be 'the greatest achievement of my life'," it said.

Then, last week, Malaysia's deputy finance minister Johari Abdul Ghani told the country's parliament that Bellew's three-year work contract dictated that he must tender six months' notice before resigning.

Bellew left Ryanair in August 2015 to become chief operations officer at Malaysian Airlines. Less than a year later in June 2016 he was promoted to the position of chief executive. But last month he was persuaded by Michael O'Leary to rejoin the embattled low-cost carrier in a bid to fix an operations mess over pilot rosters that saw it cancel thousands of flights this autumn.

The airline is also facing difficult negotiations with pilots over pay and contracts with transport unions warning over recent weeks that some flight crew could resort to strike action. Chief operations officer Michael Hickey abruptly resigned in early October. A week later, after earlier rumours of his return had been denied, it was announced that Bellew had been hired to replace Hickey.

But the deputy finance minister told the Malaysian parliament that Bellew had only given two months' notice.

"The [term] for the MAS CEO's contract is three years and in the contract, both parties can give six months' notice. The CEO can give a six-month notice, or MAS can give a six-month notice. In the case of this MAS CEO, he resigned and gave a notice short of four months. So we accepted it and he has to pay us four months salary," Johari told the parliament, according to reports in the Malaysian press.

Johari refused to give details of how much Bellew was paid by the airline and how much money the government was seeking to have him pay back, said the reports. Johari told the parliament that he had always advocated that MAS should appoint a Malaysian to the role. The airline has appointed its current chief operating officer, Malaysian native Captain Izham Ismail as Bellew's successor. Neither the airline nor the Malaysian government responded to queries.

Bellew is the second Irish-linked aviation executive in succession to suddenly quit the top job at Malaysian Airlines. In April 2016, former Aer Lingus chief executive Christoph Mueller, who is German but has a home in Howth, resigned a year into his three-year contract at Malaysian citing personal reasons that were "beyond my control".

"The show must go on," Mueller wrote to employees at Malaysian. In September 2016 Mueller joined middle eastern carrier Emirates as its chief digital and innovation officer, having been replaced at Malaysian by Bellew.

When contacted by this newspaper, Bellew responded to queries saying it was "no big issue and I wish them all the success in the world. As is normal in all employment contracts the contents are private and confidential and I've no further comment".

Ryanair had no comment on the issues raised in the Malaysian parliament and said: "Peter Bellew will join Ryanair on 1st December next."

Bellew first rose to prominence as general manager of Kerry Airport, a role he held for five years. There he helped win funding for new airport development and grew traffic from 10,000 to 450,000 in three years with 11 scheduled and charter services. He left the airline industry for a time to focus on property and web startups but was appointed deputy director flight operations at Ryanair in 2006.

In that role he had responsibility for 3,500 pilots across 63 European locations "motivating them to maximise productivity, maintain safety standards and lower network costs", according to his business profile. In 2013 he was appointed as head of sales and marketing at the airline, followed by a brief two-month stint as director of training and recruitment flight operations.

Subsequently he was appointed as director of flight operations where he was tasked with "building a new team and developing the processes to operate our new fleet order of 385 aircraft".

The "challenge to rapidly ramp up" after the new aircraft orders was "all about the process and sweating the detail", said Bellew's profile.

Industry sources have noted that Bellew is known for how well he has always interacted with pilots in his various roles, in contrast to the stormy relationship his new boss Michael O'Leary has sometimes had with flight crew.

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