Friday 29 Mar 2024
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This article first appeared in Corporate, The Edge Malaysia Weekly, on July 25 - 31, 2016.

 

PETER Bellew, group managing director and CEO of Malaysia Airlines Bhd (MAB), has wasted no time since taking the helm of the national airline on July 1. The 51-year-old has picked up where his predecessor left off on a RM6 billion recovery plan for MAB.

While he would not disclose how much of the RM6 billion capital has been used, Bellew says the balance should be enough to tide the airline over for now. It was previously reported that the plan was to use RM1.4 billion for delisting Malaysian Airline System Bhd (MAS), RM1.6 billion for retrenchment costs and the remaining RM3 billion as capital for the new MAB.

“What I am trying to do is make the plan achievable and execution is about getting the things done rather than planning things that will never happen. And I have found enough people [in the company] who are willing to lift the tempo [with me],” he says in his first press conference with Malaysian journalists last week.

The airline will be moving at full speed over the next 12 months to fill up its planes and raise the airline’s load factor from below 70% to above 85%, he adds.

“We need to become very nimble in the way we approach things. Some things we do won’t work and we need to realise that very quickly. We won’t flog a dead horse. We will only do things that make sense. We will only fly routes that have the potential to make money.”

The Irishman is the airline’s third CEO in two years and the second non-Malaysian to hold the post. His predecessor, Christoph Mueller, had stepped down slightly over a year after taking up the reins, departing unexpectedly in the midst of efforts to turn around the loss-making carrier. Khazanah Nasional Bhd had brought in Mueller to oversee the airline’s five-year 12-point turnaround plan that included cutting 6,000 jobs or one-third of the workforce and axing unprofitable long-haul routes such as Paris, Amsterdam and Frankfurt.

“We were losing huge amounts of money [on those long-haul routes]. We were trying to compete with Middle-Eastern airlines like Etihad, Emirates and Qatar Airways that were offering much lower fares than ours. [We now recognise] that growth over the next five years is going to come from short and medium-haul flights [lasting] between four and eight hours. That’s where the business is,” says Bellew, who had joined MAB as its chief operating officer on Sept 1, 2015, from Dublin-based Ryanair, where he was director of flight operations and head of sales and marketing.

In a customer-facing business, Bellew is of the view that staff morale, which fell to an all-time low after the twin tragedies of MH17 and MH370 in 2014 and the latest job cuts, is “much improved”. In the past, relations between Malaysia Airlines management and unions had not been easy as the airline went through several restructuring exercises, including a controversial share swap with AirAsia Bhd that was later scrapped. As Khazanah took the airline private in 2014 and set up a new company, MAB does not have a trade union.

“We have 14,000 employees now and I don’t see any change to that,” says Bellew.

One of the reasons attributed to the failure to turn state-controlled MAS around in the past was that its CEOs were not given a free hand to do their job. Bellew is aware of this and thinks that is perfectly all right. “I [know I] am not going to get a completely free hand [to run MAB] and I am not going to look for that. I am just one man. I won’t be stupid enough to do that when I can ask for advice from (Khazanah managing director) Tan Sri Azman Mokhtar, the MAB chairman (Tan Sri Md Nor Md Yusof) and the CEOs of other government-linked corporations.”

Earlier this month, Bellew told the Irish Independent that the restructuring of MAB is “probably the toughest job you could have in aviation at the moment”. In February, MAB posted its first net profit since 2011 and is due to release its second-quarter results at the end of August.

“We are forecasting a loss for the year but it will be significantly less than what we budgeted for. We are restoring our balance sheet as we go along and we are on track to return to the black by 2018,” Bellew reiterates.

He has begun the process to select a more permanent CEO from among internal candidates. “I can already see there are five to six Malaysians working in MAB who are capable of running the airline when I leave. That is a huge comfort to me.”

Bellew has been quoted as saying that he will “head back to the green pastures of Ireland when the airline makes a profit in 2018 and hopefully float on the stock market again in 2019”.

“Ideally, if I can get people up to speed, I can parcel up things and hand over the knowledge. It is a bit like we have been watering the flowers in the last six to nine months and a lot of great people have begun to start showing their heads. It has been a little bit of trying to find some of them hidden within the organisation,” he says at the press conference.

“I think Malaysia Airlines is still much loved by the people of Malaysia. When I came here, I thought it was just about fixing the company financially. But I soon realised that it isn’t all about fixing the company but it is like a family going through a terrible trauma. There is enormous pride in what Malaysia Airlines has done in the past. And I think the airline can be successful and profitable in the future.

“I think where we have the most work to do over the next six months is on the commercial sales and marketing side. I would say we have been a little bit quiet and shy and reluctant to blow our trumpet but we are going to make a lot of noise over the next six months.” 

 

 

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