Malaysian Airlines’ CEO shuffle begins anew

So, your airline is a mess and needs help. You call on an expert to come in and shake things up. He’s got lots of experience in such efforts and is highly regarded in the industry. And, just your luck, he agrees to a 3 year contract to right the ship. What does it say about the operation when he leaves less than half way through that term?

This is the scenario Malaysian Airlines is facing as new CEO Christoph Mueller tendered his resignation to the Board of Directors this week. Mueller will serve out a 6 month transition period so it is not as abrupt a departure as it could have been. And yet there are still many reading in to the early departure as nothing but negative for the carrier.

On the plus side, Mueller reported in February that MAS had closed the half billion dollar gap in earnings for the month of February from a year prior, hitting break-even for the month. This suggests that there’s a chance the company is set to return to profitability – or at least stability – in the near future. Then again, that was just one month and MAS faces plenty of challenges, both internal and external, in maintaining operations moving forward. Just from a fleet planning perspective consider that the 747s returned to flight after being officially retired; the move is temporary to handle a reduction in available wide body aircraft during maintenance cycles, but it is still a challenging position for the carrier to be in.

Kazanah National Berhad, the sole shareholder of MAS, issued a statement regarding the departure including the following:

While we would have wanted Mr. Mueller to continue as planned, we also respect and ultimately agree to his decision to leave ahead of the end of his three-year contract, due to a change in his personal circumstances. …

We note that Mr. Mueller has laid the groundwork, put in place a strong management team, and undertaken the necessary measures and initiatives that have produced encouraging signs of progress on Malaysia Airline’s path to recovery, as called for under the five-year 12-point MAS Recovery Plan (“MRP”).

“Personal reasons” can mean any number of things and I’ve seen other airlines in the region facing similar challenges suddenly find “personal” reasons for their CEO to depart. It is unfortunate but not all that uncommon, especially with political pressure influencing operations.

MAS has faced more than its fair share of challenges over the past few years and its future remains unclear. Far more murky now, actually, than it was just a few months ago.

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Seth Miller

I'm Seth, also known as the Wandering Aramean. I was bit by the travel bug 30 years ago and there's no sign of a cure. I fly ~200,000 miles annually; these are my stories. You can connect with me on Twitter, Facebook, and LinkedIn.

One Comment

  1. I flew MH last week. Things are so bad that in order to manufacture the “profit” they’ve stopped cleaning the airplanes; mine was noticeably filthy. That can’t be good for yields.

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