Irish airlines outgoing chief tipped to lead MAS

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(October 7): Outgoing Aer Lingus chief executive officer Christoph Muller is tipped to lead loss-making Malaysia Airlines (MAS) after its latest restructuring, sources say.

The Irish airlines announced in July that the German aviation veteran would step down as chief executive officer and director effective May 2015. But, did not say where he would go next. Both Aer Lingus and MAS are part of the Oneworld alliance.

"Mr Muller is the one for the job," a source told The Malaysian Insider.

MAS main shareholder Khazanah Nasional Bhd had sought a few candidates and settled on Muller a few months ago, but could not disclose as he was not available immediately.

Mueller joined Aer Lingus as CEO in September 2009 and had turned around the airline away from being in the doldrums.

Aer Lingus chairman Colm Barrington commended Mueller for service over that time when announcing his departure in July.

"Under Christoph’s strategic leadership, Aer Lingus has been transformed into a strong, consistently profitable airline with a clear strategic direction, a resilient business model as a value carrier and an improved cost base," he was quoted as saying by the Irish Independent daily.

Muller had stints as executive aviation director at TUI Travel plc, a FTSE 100 company and served as the Chief Financial Officer of DHL Worldwide from 2002 to 2004.

He also had extensive experience within the aviation industry, having held senior position in Daimler Benz Aerospace, was executive vice-president at Lufthansa AG and CEO of the Sabena Group.

He has an MBA from the University of Cologne and subsequently completed an advanced management programme at Harvard Business School, according to the Aer Lingus website.

Reports from The Star and Singapore daily The Straits Times today said a foreigner was set to head MAS as CEO, a first for the flag carrier.

The move was seen as a signal to the various stakeholders that Putrajaya is going all out in its efforts to make MAS strong and sustainable.

“The candidate is among three shortlisted. He is a person from the airline industry... not somebody from outside the industry,” The Star report quoted a source as saying.

“Apart from the CEO, MAS will also hire another five or six key personnel who are knowledgeable in specific areas of the industry to cut costs.

The Cabinet, on August 27, had approved the restructuring plan put forward by Khazanah for the airline which, among others, would see up to 6,000 jobs cut.

The restructuring plan was deemed necessary as MAS had been suffering financial losses for years.

The Malaysian Insider had reported that the plan also includes roping in top foreign executives to help turnaround the national carrier as part of the massive revamp exercise – the latest plan since the Wide Asset Unbundling (WAU) exercise of 2002 – a year after Putrajaya bought back MAS from tycoon Tan Sri Tajuddin Ramli.

Apart from staff cuts, the RM6 billion restructuring exercise will also see the flag carrier dropping unprofitable routes and scaling down flight frequencies as well as reviewing lopsided contracts signed with various stakeholders.

Khazanah managing director Tan Sri Azman Mokhtar had also said that a new company would be set up to house the carrier once it completes its delisting exercise by the end of this year.

Current CEO Ahmad Jauhari Yahya will continue to lead until July 2015 when the new company comes into force.

If everything goes as planned, MAS will be relisted within three to five years, or between the end of 2017 and 2019, and Khazanah will embark on a sell-down or partial sell down of its stake.

Last week, MAS had appointed Mohd Nadziruddin Mohd Basri as the chief restructuring officer (CRO) in charge of the Restructuring Management Office.

The Star report said one of the reasons attributed to the previous failed restructuring of MAS was that a non-airline person had been put in charge to drive operations.

“Now the committee in charge of the restructuring is making sure every key post is handled by a person from the industry. If there is no expertise locally, then foreigners will be hired,” the report quoted a source as saying.

It is learnt that the contract terms for the new appointments will be based on a three-year period, with a two-year extension period.

“The first three years are to fix the problems and put the structure in place. The subsequent two years are to make sure they deliver the results for MAS.

“Previously, the appointed people gave solutions but were not held accountable to see it through. Now, that is what the board wants,” said a source.