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[KUALA LUMPUR] Malaysia Airline's chief executive officer isn't shying away from cutting jobs or scrapping routes to return the carrier to profit, though he's not particularly fond of the nickname he's acquired doing so.
Christoph Mueller took the top post in May with the task of restoring profit to an airline already losing money before last year's twin tragedies. He came to the job with turnaround experience at Ireland's Aer Lingus Group Plc, and having presided over the shutdown of Belgium's Sabena SA in 2001, and was quickly dubbed "The Terminator." It will probably take "at least a year" before revenue recovers as restructuring efforts take hold, Mueller, 53, said in an interview at a global airline industry conference in Miami. While he has eliminated about 6,000 jobs, the sobriquet he has acquired in the news media regarding job cuts is "totally made up," he said. "Nobody ever called me that" in Ireland.
Mr Mueller is in charge of forming a new, rebranded company carved out of Malaysian Airlines System Bhd, which was delisted in December and will cease to operate in August. Malaysia Airlines is seeking to change after one plane disappeared in March 2014 and another was shot down over Ukraine. The disasters punctuated years of losses amid competition from nimbler, lower- cost rivals.
In addition to eliminating about 6,000 positions, the carrier has changed its pricing policy, cut seating capacity and revised schedules, Mueller said. If the turnaround is a success, the German CEO wants to make several thousand temporary contracts permanent.
Mr Mueller has invited at least 14,000 employees to join the new group and is targeting break-even results by 2018, as well as a 20 per cent reduction in costs.
"If the recovery is delayed then we still have some downward flexibility," Mr Mueller said, speaking on the sidelines of the International Air Transport Association's annual meeting.
Part of Mr Mueller's plan is to create 12 subsidiaries within the group in order to foster "a little bit the entrepreneurial approach," he said. Divisions ranging from cargo to maintenance will get "specific bottom-line targets as opposed to just cost- saving targets," he said.
The airline's domestic and regional Asia market is "quite healthy" and remains Malaysia's "bedrock," Mr Mueller said. "We will improve and optimize our network on long-haul and those stretches we still fly with short-haul aircraft." The carrier is also reviewing all its existing contracts to purchase planes, and is considering selling or subleasing two of six Airbus A380 super-jumbo planes, Mr Mueller said. "The last word will only be said on that issue when the administrator has finished its work at the end of August." While important, Mr Mueller said his experience at Aer Lingus is only one factor guiding his actions at Malaysia.
"I would not limit it to Aer Lingus, but lessons I learned myself in the various jobs I had and lessons generally learned by being in the industry."