Wednesday 19 December 2018

Mueller facing turbulent times turning around Malaysian Airlines

A sailor onboard Austrlian Navy ship HMAS Toowoomba as it searched in the southern Indian Ocean for flight MH370
A sailor onboard Austrlian Navy ship HMAS Toowoomba as it searched in the southern Indian Ocean for flight MH370

Kyunghee Park and Kari Lundgren

In 2015, outgoing Aer Lingus chief executive Christoph Mueller will embark on one of the toughest jobs in aviation: turning around an airline that has lost two jets and 537 lives this year.

The 52-year-old German national was named as the surprise choice to lead Malaysia Airlines, amid a slump in traffic and widening losses. He will need to restore confidence in the airline while cutting 6,000 jobs.

He'll be the first foreigner to ever lead the airline, and his appointment has been a controversial one in Malaysia.

And despite moving to Malaysia, he'll also remain as chairman of An Post and a board member of Tourism Ireland.

"It's got to be one of the biggest challenges in the airline business today," according to John Strickland, an aviation specialist at JLS Consulting.

"It's a job that needs a tough nerve, patience and a few deep breaths to take it forward. They've got to get back to a point of credibility and respect."

Malaysia's government, criticised for its handling of the MH370 disappearance over the Indian Ocean, has unveiled a €1.4bn restructuring package aimed at restoring profitability in three years.

In July, one of its aircraft was shot down by Russian separatists over Ukraine.

Mr Mueller, who turned around Aer Lingus as it was contending with Ryanair and an economic collapse, faces a similar task as Malaysia Air struggles to fend off AirAsia, the region's biggest low-fare carrier.

Ironically, it was co-founded by former Aer Lingus and Ryanair executive Conor McCarthy, who later founded and heads Dublin Aerospace.

Mr Mueller's contract at Aer Lingus expires at the end of May next year, but Malaysia Airlines is keen to get him on board by March.

Turning around the carrier is going to be time consuming, said Mark Martin, chief executive officer of Dubai-based Martin Consulting.

Mr Mueller may need at least six to nine months to familiarise himself with the company and the culture in Southeast Asia before he can take actions, Martin said.

"We believe this may lead to precious time being lost," in turn affecting Malaysia Airlines' market offering and positioning, he said.

(Bloomberg)

Irish Independent

Business Newsletter

Read the leading stories from the world of Business.

Also in Business