Malaysian Air Chief Putting Last Touches to Southeast Asia Hub

Christoph Mueller

Christoph Mueller, chief executive officer of Malaysian Airline.

Photographer: Chris Ratcliffe/Bloomberg
  • CEO Mueller fine-tuning number of flights to regional cities
  • Carrier shifting focus from Europe-Australia after demand drop

Malaysia Airlines said a network restructuring aimed at establishing its base in Kuala Lumpur as a hub for travel to fast-growing regional economies including China and Vietnam is 90 percent complete.

“We’re fine-tuning with regard to the frequency pattern, but the capacity-per-destination is fixed,” Chief Executive Officer Christoph Mueller said Wednesday in an interview in London. “The network design was 15 years old and largely driven by traffic from Europe to Australasia.”

Mueller took over in March, tasked with reviving a carrier that was racking up losses even before before the deaths of hundreds of people in two crashes last year led to a plunge in traffic. After cutting 6,000 jobs, slashing pay and trimming capacity by 30 percent the CEO said he’s done with major changes and ready to target markets also including Cambodia, Laos and Myanmar.

“I tried to front-load the restructuring exercise because the consequences of capacity cuts are you have to release employees and if you do that over time, it’s like having the flu for weeks," Mueller said. "You want to have that all in the front so there is no further bad news for employees.”

Malaysian Air is shifting to smaller jets as part of the revamp, seeking a buyer for two of its six Airbus Group SE A380. Mueller said five superjumbos are deployed on its London route, with the other used for charter trips, including flying the Real Madrid soccer team on an Asian tour and taking Muslim pilgrims to Mecca. The rollout plan for four A350s due in 2017 will be decided next year.

The airline has amassed more than 4.9 billion ringgit ($1.2 billion) in losses since the start of 2011 and was taken private by Khazanah Nasional Bhd in a 1.38 billion ringgit buyout. The sovereign wealth fund has committed to invest 6 billion ringgit in the restructuring plan.

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