News

MAS chief spills beans about new airline

1 Jun 2015 by Clement Huang

Malaysia Airlines is set to go through some radical changes as it adopts a new name and brand from September 1.

In a briefing held in Kuala Lumpur earlier today, the airline’s new chief executive-designate Christoph Mueller admitted that MAS as it currently exists is "technically bankrupt”, but also emphasised that its financial woes preceded the MH370 and MH17 incidents in 2014.

Indeed, majority shareholder Khazanah Nasional had drafted its proposed restructure plan back in January 2014, prior to the aforementioned tragedies.

“We’ve taken a hard beating in our revenue even before 2014, as passenger load has suffered, frequencies reduced, and we were forced to axe numerous routes,” said Mueller.

To that end, MAS has embarked on a project that will see it cease all operations, with a new company to take its place. Mueller stated that this development would not be a simple re-brand but an entirely new airline. 

“I would like to stress that we are not just MAS in a disguise. We are truly a start-up with a new vision,” said Mueller.

Given "that [the MAS] brand has been tarnished”, it makes sense that a “hard reset” be implemented to regain customer confidence, as described by the airline’s chief executive. 

This will include applying for a new Air Operators Certificate – something that the company has already begun pursuing. 

Mueller shed some light on the new airline, which he stated would exist as part of a group, as opposed to a single entity. In particular, the company would consist of the yet-to-be-named main carrier, along with MASwings, Firefly and MASkargo. 

As we previously reported (see here), MAS has already laid off a third of 20,000-strong workforce. Mueller confirmed that around 14,000 employees have been offered new contracts for employment at the new company.

However, as the company err on the side of caution, many of these contracts are temporary, with Mueller expressing hope that the turnaround will enable the airline to offer them permanent deals in the future. 

“We need to stop the bleeding – this will be an all cash focus. We have to identify where we’re losing money, and deal with it accordingly,” said Mueller.

There will not be any significant changes to the new carrier’s network. Mueller said that the airline would not be a regional carrier, but maintain its international presence. He does not foresee any cutbacks to its domestic network either.

However, as reported by us previously (see here), there will be big changes made to the airline’s fleet. In particular, Mueller officially confirmed that MAS was looking to sell two of its A380s, which he deemed “surplus to requirements”. 

The remaining four superjumbos will continue to operate to London.

“The London route is our flagship route, and we’re very happy with it. We also have a lot of cargo capacity [in it], and we’re not going make any changes to that,” said Mueller.

In addition, the airline will also be improving the cabin products on its other aircraft models. Business class on the A330s and B777s for instance will be refurbished to feature flat bed seats – something currently only available on the A380s.

Finally, Mueller emphasised that it was still early days for the new company, and there was still a lot to do before any thought of full recovery could even be considered.

“We will walk through the gates on September 1, and embark on a new path of doing business,” said Mueller. 

“It’s still early days. The horse is new to me. I don’t know if it is a donkey or a horse.”

For more information, visit malaysiaairlines.com

Clement Huang

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