After all, the latter had suffered its very own annus horribilis with its two twin tragedies leaving it teetering on the edge of bankruptcy.
However, Mueller saw no problems. “I came to the conclusion that this is a doable job and that there are no insurmountable obstacles,” he says.
Although the Irish carrier was struggling in the face of competition from low-cost rivals, what Mueller faced when he started at Malaysia Airlines on May 1, 2015 was something completely different. Following the two accidents – the disappearance of MH370 and the downing of MH17 – the Malaysian government bought out the smaller shareholders in the airline so it could enact wide-ranging reform.
On September 1, a new company – Malaysia Airlines Berhad – was born. But not all of the old firm’s 20,000 employees could come along. Around 6,000 people lost their jobs in what Mueller describes as “the largest corporate redundancy ever in Malaysia”.
“I came to the conclusion that this is a doable job and that there are no insurmountable obstacles”
Christoph Mueller
“I’m very sad,” he admits. “A lot of people had to leave.” Mueller has made sure that those employees who have transferred across have been fully involved with the changes taking place.
“If you just repaint the aircraft without changing the content, then the disappointment might be larger than before,” he says. Talk of a new brand is batted away though.
“I think it is justified to give the company a new raison d’etre. It might be expressed by a new brand or a new logo, but more important is that it’s expressed by new values and behaviours by our people.”
Changing times
Mueller is brutally honest about the other challenges ahead as he looks to secure the airline’s future.
“The truth is our network is 15 years old,” he says. Malaysia Airlines was focused on the kangaroo route from Europe to Australia and put in its order for the gigantic Airbus A380 only a few months after the September 11 terrorist attacks.
Back then, Emirates was still a relatively small player compared with the legacy airlines and Etihad had yet to start flying. But times change. Now the kangaroo route is almost entirely in the hands of the Gulf carriers and their partners.
As a result, Malaysia Airlines’ Frankfurt route has already been culled. The A380s will stay for the time being though with a handful of them servicing Heathrow.
“We need four of them every day, five if you take a reserve aircraft, Mueller informs. “We are very happy operating there twice a day – it’s one of our bread and butter routes.”
Malaysia Airlines’ rationalisation does mean a “major reduction” to its fleet of Boeing 777s though. Most of its 737-800s will be kept and all Airbus A330s will be retained. Some of the carrier’s old partnerships will also probably be abandoned in favour of newer, more pragmatic ones.
“Ultimately, I’d like to offer our business passengers [the ability] to reach literally every relevant point on the globe with an MH ticket,” Mueller says. Malaysia Airlines’ chief executive refers to the difficulties in Europe as the glass-half-empty scenario.
The flip side is expansion in Asia. “We are perfectly located with our hub to expand,” he says. “Kuala Lumpur International airport (KLIA) is the only airport in south-east Asia with unlimited capacity.”
The three-runway hub at KLIA handles only 65 movements an hour compared with 55 movements per hour at the single-runway Gatwick in London. “Every other airport in south-east Asia is at their capacity limit,” Mueller continues. “We use one third of what’s possible. So we can grow in frequencies.”
Asia challenge
Mueller’s determination to carry out widespread reform at the airline comes at a pivotal moment in aviation.
Cheap fuel together with more fuel-efficient planes have made flying more affordable, but according to Mueller there are still not many carriers in Asia making money.
Five years ago it was the big US carriers that were struggling, but after a period of consolidation most are making money. Mueller is looking to Asia Pacific to follow suit.
One trend he remains on the fence about is Lufthansa’s decision to levy a €16 charge on GDS transactions.
“You know what a stamp costs if you send a letter and what your mobile provider is charging you for a text message or for a voice call,” he says.
“So how about transparency on the airline consumer side: what are airport fees? What are taxes and charges? What really is the airfare? And what is the distribution cost? I would subscribe to that. But will I implement a Lufthansa-like model? I don’t know.”
Whatever the decisions Mueller makes in the coming months about the airline’s product, fleet and route network, they have to be implemented in the shadow of the two aircraft losses. Motivating the staff will be vital to success.
“When I arrived, our employees were still in a deep state of shock: I’ve never seen that in another airline,” he concludes. “We all suffer still from the memory, but we also have the obligation to move on because we have to take care of ourselves as a community of employees and create a company that is profitable and that can survive without any support from the government.”
