New Aer Lingus chief faces big task to get it flying high
AER Lingus ended a three-month search for a new chief executive yesterday by naming a German aviation executive who led Belgium's airline Sabena until it went broke eight years ago.
Christoph Mueller will become Aer Lingus's 11th chief executive in 16 years in October when he takes the top job at the loss-making airline which has struggled to slash costs and repel two unwanted take-over bids from rival Ryanair in as many years.
Mr Mueller replaces Dermot Mannion who quit in April after a turbulent three-an-a-half years at the airline which saw it pass from State ownership into shareholders' hands. There followed a bitter and bruising argument about his attempts to negotiate a €2.3m golden parachute deal for himself and scrap flights to Shannon.
Stem the losses
The appointment removes one cloud hanging over Aer Lingus but investors are still some distance from learning of a new strategy to stem the losses that threaten the airline's existence. It has already admitted it is unlikely to make a pre-tax profit this year due to stiff competition and recession.
The 47-year-old has worked for everybody from Lufthansa and Daimler Benz to Deutsche Post and travel giant TUI.
"He has some stellar names on his CV," said NCB analyst Neil Glynn. "From that point of view it looks like a good appointment . . . Clearly the bigger issue is the extent of restructuring that needs to happen."
Shares in Aer Lingus have been the worst performers on the stock exchange so far this year, tumbling 63pc as losses mount and the airline burns through a cash pile without any signs of a turnaround.
Aer Lingus shares, outperformed the index yesterday, rising as much as 3.4pc, to 54.5 cent following news of the appointment.
Aer Lingus lost €108m last year and has since announced a series of cuts, including an end to some long-haul flights introduced by Mr Mannion during his stint as chief executive.
The appointment of a foreigner to the top job in any Irish company is a rare event and most observers had expected the airline to name an internal candidate such as deputy chief executive, Niall Walsh, or chief finance officer, Sean Coyle, who joined the airline from Ryanair.
The surprise choice has a long list of former employers since beginning his career in 1988 as an analyst in Lufthansa. In 1991, he joined Daimler Benz as a financial director at subsidiary Deutsche Airbus. In 1994, Mueller returned to Lufthansa.
In 1999, he completed a management degree at Harvard University. A year later he joined Belgium's Sabena which went bust under his stewardship. Two years later, he moved to DHL Worldwide Network as chief financial officer.
He then moved to Germany-based TUI, Europe's largest travel group, until resigning earlier this year.