This article first appeared in The Edge Malaysia Weekly on December 25, 2017 - December 31, 2017
MALAYSIA’S aviation industry continued to watch in disbelief as the national airline lost another CEO this year. Peter Bellew, who took the helm at Malaysia Airlines Bhd (MAB) on July 1, 2016, following a one-year stint as its chief operations officer, resigned in October. He was the third CEO to step down in less than three years, following the departures of Christoph Mueller and Ahmad Jauhari Yahya.
Bellew was also the airline’s second non-Malaysian CEO and managing director after Mueller.
Bellew’s sudden departure raised questions as to what really goes on behind the closed doors of Khazanah Nasional Bhd’s office at the Petronas Twin Towers in Kuala Lumpur — Khazanah being the sole shareholder of MAB.
This is because Bellew’s resignation was not announced properly to the public. In fact, London-listed Ryanair Holdings plc let the cat out of the bag in its stock exchange filing when it announced the appointment of Bellew as the low-cost carrier’s new chief operating officer (COO). Indeed, Khazanah’s initial response to the media indicated that it was also unaware of Bellew’s decision. In a statement issued on Oct 17, it said it was caught off guard by the announcement that Bellew would be returning to the Irish airline.
Bellew was not forthcoming either. About three weeks before resigning, he had expressed his commitment to MAB.
Talk surfaced that Khazanah’s meddling in the decision to acquire or lease a new fleet of wide-body aircraft led to Bellew’s resignation. The sovereign wealth fund denied the talk and refuted an article in an English daily about the purported meddling.
Now, a new CEO is in the hot seat. Captain Izham Ismail, a career aviation man with more than 30 years of experience, was appointed just three days after Bellew’s departure. Will he stay?
Peter Bellew
CEO, Malaysia Airlines Bhd
(June 2016 to October 2017)
The position as the CEO of a beleaguered legacy airline is not something that many people would want to take, but Bellew was pushed into the spotlight after his predecessor Mueller resigned after about a year at the helm. Bellew carried on Khazanah Nasional Bhd’s 12-point recovery plan for MAB, which aimed to return the national carrier to profitability by end-2017 and undergo a relisting by 2020.
Bellew was confident of turning around MAB. After all, he had been making announcements periodically about the airline’s operational performance from the get-go, telling the world that the transformation of the group was on track.
However, things at MAB started to get controversial when the airline went to the US as part of Prime Minister Datuk Seri Najib Razak’s state visit to the White House in September.
During the visit, in which Najib famously proclaimed the Malaysian government’s intention to help strengthen the US economy, Bellew signed a memorandum of understanding (MoU) with Boeing for the purchase of eight Boeing 787 Dreamliners, a wide-body aircraft, in a deal that was worth US$2.5 billion (RM10.2 billion).
The media started to treat the MoU as if it were a firm order by MAB, which the airline later denied. It stressed that it had only entered into firm orders for 25 Boeing 737 MAX, while other arrangements were only to allow the group to be flexible in making decisions about its fleet replacement and expansion programme.
Had MAB firmed up the MoU and ordered eight Dreamliners, it would have more than doubled its long-haul, wide-body fleet, which consists of six Airbus A350 XWBs. This would mean a diversion from the earlier vision, which was for MAB to become an airline with extensive regional networks, rather than intercontinental.
Following the brouhaha in regard to the “purchase” of eight Dreamliners, rumours started to swirl among industry players and observers that Bellew was under pressure to sign the MoU by certain parties, to make the visit to the White House more impactful.
There was even an article in a local daily saying that Bellew’s departure was due to Khazanah’s interference in the running of MAB, which Khazanah strongly denied.
What is interesting in the way Bellew left MAB is the press conference that came with it. Bellew had called for a press conference to explain why he had resigned from MAB, citing his love for Ireland as the main reason for his departure.
More interesting was how Bellew went on to criticise Tun Dr Mahathir Mohamad during the press conference, after the former prime minister alleged that the Irish man quit MAB because of the government’s meddling.
Captain Izham Ismail
CEO, Malaysia Airlines Bhd
The man who was appointed to succeed Bellew is not really new to MAB. After all, he started his career in the aviation industry in 1979, with the then Malaysian Airline System Bhd (MAS).
In the current airline group form, Izham was the COO from Sept 1, 2016, and played an integral role in the ongoing execution of the turnaround plan.
However, to the Malaysian public, he is the new kid on the block. What is he made of? Will he be able to steer MAB to sustainable profitability through professional management practices?
Besides being a seasoned pilot, Izham’s management skill was first cultivated when he joined MAS’ flight operations management team in the 1990s. His major accomplishments include leading the Y2K Air Operations for the Flight Operations Division of MAS, as well as leading the division for the introduction of the Airbus A330-300 and the Boeing 777-200 to service. His areas of expertise include managing projects related to flight operations, and planning and managing fleet operations and training requirements.
His first senior position in MAS came in 2012, when he was appointed director of operations and, later, senior vice-president of operations and development. Under the leadership of Mueller, Izham was appointed head of the operations programme management office, overseeing more than 100 projects, which were key to the turnaround of MAS. He is also one of the directors of MAB Kargo, and the CEO of MASwings.
His vast experience, from pilot to flight operations and management to air freight, gives Izham all the required knowledge to keep MAB on the right course.
Commenting about his appointment to the top post of MAB, Izham says it is both an honour and a big responsibility. He is looking forward to making the national airline the pride of the nation again.
With both Mueller and Bellew putting MAB on track to soar again, it is, therefore, a huge responsibility for Izham to ensure that the national airline does not go off course. Can he do that and will Khazanah, being the sole shareholder of MAB, give him the necessary support to steer the national airline forward?
The whole nation is watching.
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