Malaysia Air CEO Mueller Quits, Posing Challenge for Turnaroundby and
Mueller to depart in September after joining airline last year
Carrier says it has already commenced search for new CEO
Malaysia Airlines Bhd. said Chief Executive Officer Christoph Mueller will leave the company before his term ends, posing a new challenge to turn around the carrier after two plane crashes in 2014 dented its sales and reputation.
Mueller requested to step down before the end of his three-year contract for personal reasons, the carrier said in a statement Tuesday. Malaysia Airlines said it has started a search for a new CEO that will include internal and external candidates.
After cutting 6,000 jobs, reducing pay, and trimming capacity by 30 percent, the onus is now on Malaysia’s government to find a successor to continue the revival plan put in place by Mueller, who became CEO-designate in March 2015. A veteran of a turnaround effort at Aer Lingus Group Plc in Ireland, Mueller was charged with reviving a carrier that was racking up losses even before hundreds of people died in two 2014 crashes.
“This is almost an impossible job,” said Shukor Yusof, founder of Endau Analytics, an aviation consultant in Malaysia. “There have been signs of improvement but it’s only signs. The airline may have resolved short-term issues but for the long term it’s still uncertain.”
Malaysia Air is on track to return to profitability as the airline’s restructuring effort is proceeding as planned and the company is finished laying off employees, Mueller said in an interview in February. The carrier wants to buy and own some aircraft once its targets are met, as its existing fleet structure is skewed toward leased planes, he said.
State sovereign-wealth fund Khazanah Nasional Bhd. took the carrier private by buying out small shareholders to help the Sepang, Malaysia-based company return to profit.
Mueller intends to remain with the company as a non-executive director and will serve a six-month notice period until September to facilitate an orderly transition, the airline said. The board has appointed Chief Operations Officer Peter Bellew as an executive director, it said.
“I am proud of what we have achieved as a team in such a short time,” Mueller was quoted as saying in the statement. “Unfortunately, personal circumstances will make it difficult for me to complete my full term.”
Malaysia Airlines made its first small monthly profit in “many years” in February and is on track to return to profitability by 2018, Mueller wrote in a circular to staff on March 28, Malaysian Reserve reported. A network restructuring aimed at establishing the company’s Kuala Lumpur base as a hub for regional travel is 90 percent complete, he said in November.
Malaysia Airlines was already losing money before passenger confidence was shattered after Flight MH370 vanished on March 8 while en route from Kuala Lumpur to Beijing. The carrier lost another aircraft when MH17 was shot down over Ukraine four months later.