This article first appeared in Corporate, The Edge Malaysia Weekly, on June 20 - 26, 2016.

MALAYSIA Airlines Bhd (MAB) chief operating officer Peter Bellew is believed to have been picked to succeed Christoph Mueller as the CEO of the national carrier. The latter’s tenure ends in September.

Sources close to Khazanah Nasional Bhd say the sovereign wealth fund has offered Bellew the top job and was supposed to have announced it last Monday. However, the announcement has been postponed to a later date, they add. 

“Peter (Bellew) is going to be the next CEO; the contract has been signed. However, it still requires the prime minister’s official approval, (although) he has given his approval in principle,” a source tells The Edge.

Bellew, who was the director of flight operations at Europe’s largest low-cost carrier, Ryanair, was hired by MAB last September. At the time, the 51-year-old Irishman had served Ryanair for nine years, dealing with legal disputes with pilots and overseeing sales and marketing.

Bellew was chosen as the next MAB CEO because Khazanah wants continuity of policy and direction at the national carrier, the source says. He will assume the post in September this year, following Mueller’s departure.

Besides Mueller and Bellew, Khazanah also brought in Paul Simmons as chief commercial officer. The three foreign aviation experts were brought in when MAB was in dire straits last year.

Mueller was appointed a non-executive director of the then Malaysian Airline System Bhd (MAS) on Jan 1 last year and made the CEO that May. After the new entity MAB was formed, Mueller became its chief on Sept 1.

He was supposed to stay on for three years — until Sept 30, 2018 — when the airline is targeted to be profitable. However, in April this year, MAB announced that Mueller was leaving the airline in September, after just one year at the helm.

The resignation raised concerns that the restructuring of the carrier would come to a halt. During his tenure at both MAS and MAB, Mueller has overseen the largest retrenchment exercise ever done in Malaysia’s history and struck an overarching partnership with Emirates.

“Khazanah doesn’t want all of Mueller’s efforts to turn around MAB to go to waste, thus Bellew’s appointment. This way, whatever Mueller has put in place will continue to be implemented as Bellew has always been a part of his team,” says the source.

If his appointment is approved by the Prime Minister’s Office, Bellew will serve out the rest of Mueller’s contract and have an option to stay on for another two years, says the source.

Malay lobby in Khazanah wants Omar Siddiq

However, another source tells The Edge that though the contract has been signed, things can still change because the prime minister has not approved Bellew’s appointment yet. Traditionally, the prime minister’s approval is required for all of Khazanah’s top appointments.

Currently, there are parties in Khazanah who want a local to lead the national carrier. They are pushing for MAB chief financial officer Omar Siddiq Amin Noer Rashid to be made the CEO instead of another foreigner, says the source.

Omar, who holds a concurrent post as executive director of investment at Khazanah, had assumed his position at MAB in December last year. His work experience includes a stint as a director of CIMB Investment Bank Bhd and executive director at PricewaterhouseCoopers.

“The Malay lobby is saying a foreigner doesn’t have an affiliation to the Malaysia Airlines brand and that during his tenure, Mueller’s attention was divided between Malaysia and Germany,” says the source.

While Omar has an impressive background, he does not seem to have much experience in the aviation industry.

“Regardless of how impressive his background is, Malaysia Airlines cannot be run by an accountant,” says the source.

This sentiment, that a local, especially a bumiputera, should head MAB, has been floating around since Mueller became the airline’s CEO. A notable critic is former prime minister Tun Dr Mahathir Mohamad.

Nevertheless, Omar is not the “Malay-first” lobby’s first choice to replace Mueller. It is learnt that it wanted MAB non-executive director Datuk Seri Shazally Ramly to fill the position but Shazally declined the job.

“Much to the chagrin of the Malay-first lobby, Shazally is on board with Khazanah’s choice of appointing Bellew to the top post,” says the source.

Hiring foreigners to lead government-linked companies has always been a touchy subject in Malaysia. Traditionally, the government appoints a local expert, especially a bumiputera, to lead a GLC.

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