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Outgoing Malaysia Air chief defends cuts, mulls final jet order

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Malaysia Airlines Bhd chief executive officer Christoph Mueller, midway through a six-month notice period following his surprise resignation in April, said the company should resist unwinding a turnaround strategy that's cut 6,000 jobs and reduced capacity by almost a third.

[LONDON] Malaysia Airlines Bhd chief executive officer Christoph Mueller, midway through a six-month notice period following his surprise resignation in April, said the company should resist unwinding a turnaround strategy that's cut 6,000 jobs and reduced capacity by almost a third.

The Asian carrier is ahead of schedule with its restructuring, having reached break even recently, putting it on course for a full-year profit in 2018 as targeted, if not earlier, Mr Mueller, who leaves in September, said in an interview.

"If I had one wish it would be for the implementation of the plan as outlined," the 54-year-old executive said in Dublin. "No change in strategy, no hesitation over whether it should really be that system." Mr Mueller was hired in March 2015 after Malaysia Air's reputation and sales were hit by two fatal crashes the previous year, one involving a plane that disappeared over the Indian Ocean, the other a missile strike on a jet flying above a Ukrainian war zone.

In the period since, he has directed it away from global markets and toward the Asia-Pacific, seeking to establish Kuala Lumpur as a hub for the region rather than a staging post for travel from Europe.

The "tough decisions" of job and route cuts, the retirement of the Boeing Co 777-200 fleet and the renegotiation of aircraft lease rates have all been taken, leaving the overhaul of internal processes such as revenue accounting as the most pressing issue, Mr Mueller said last week at the International Air Transport Associations annual gathering.

The executive, who previously helped revive Ireland's Aer Lingus Group Plc, said such changes can often be among the toughest to implement, as the level of disruption caused can lead companies to dilute their original plans.

One of the German's last acts as CEO is likely to be the announcement of an order for a new fleet of long-range narrow-body jets in the next couple of months to serve a new category of routes that Malaysia Air plans to target.

Mr Mueller said the carrier is evaluating the Airbus Group SE A321 for the role serving secondary cities in China and other countries in the area, as well as Boeing's 737 Max 9.

The former Boeing 757, discontinued in 2005, would have been the natural plane for the routes, he said, citing a Kuala Lumpur-Darwin, Australia, flight as the only one currently on offer that fits the profile.

Mr Mueller, who previously told employees he was leaving the national carrier for reasons that were personal and beyond his control, said he had intended to serve the full three years of the contract when he signed.

"I wouldn't have taken the job if it had been meant for only 1 1/2 years," he said. "But that's a little bit out of my control. We have to deal with that fact, we cannot go back."

BLOOMBERG