MAS CEO and MD Mueller quits in Sept ahead of his 3-year contract

(The Star) – In a dramatic message to the employees of Malaysia Airlines Bhd (MAS), the first non-Malaysian handpicked to head the national carrier, Christoph Mueller, who will be exiting the national airline in September, told them that “the show must go on!” in an internal memo seen by StarBiz.

Mueller, who took over from Ahmad Jauhari Yahya last May as chief executive officer (CEO) and managing director and undertook the restructuring of Malaysia Airlines System Bhd that later morphed into Malaysia Airlines Bhd, would have served just 15 months. He would now be serving out his six-month notice period.

Khazanah Nasional Bhd, the parent of MAS, said in a statement that Mueller had chosen to leave ahead of his three-year contract due to changes in his personal circumstances. He would continue to remain on the MAS board as a non-executive director. Khazanah, Malaysia’s sovereign wealth fund, took the airline private in late-2014 as part of a turnaround plan.

“While we would have wanted 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,” Khazanah said in the statement.

Mueller said in the internal memo that his decision to leave MAS was due to “personal reasons that are beyond my control”.

“In order to facilitate a smooth transition, the board has appointed Peter Bellew, MAS’s chief operating officer as executive director of the board with immediate effect. I hope to be able to remain as non-executive member of the board of directors for some time, subject to approvals, to ensure we stay focused and we stay on course,” he said in the memo.

Meanwhile, Khazanah thanked Mueller for his instrumental contribution in the restructuring efforts, all the while demonstrating strong performance as the person tasked with implementing the turnaround of the national carrier and developing talent for eventual local succession.

Khazanah noted that 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 MAS’ path to recovery, under the five-year 12-point MAS Recovery Plan (MRP).

“Khazanah as the sole shareholder of MAS will, in consultation with the MAS board and the Government, through the Minister of Finance, undertake the succession planning for the new CEO of MAS.”

It added that the final decision on the new CEO of MAS would be undertaken through all necessary consultation and approvals before the end of Mueller’s term this September.

Khazanah noted that the MRP implementation remains on track and on schedule over the 20-month period since its announcement in August 2014. Khazanah will continue to support and drive the recovery further in the remaining 40 months of the MRP.

Mueller also shared his satisfaction to the airline’s employees in the internal memo, saying that the airline was progressing well and that plans were on track.

“We have delivered our financial budget for the first three months of 2016, our on-time-performance is increasing and very stable and our customer service index is recovering with more significant improvements in the pipeline. As you know, we have already seen a profit in February and we are also ahead of our budget, which gives a strong indication that our turnaround initiatives are pulling through faster than expected,” he wrote in the memo.

Mueller said he felt particularly sad to leave the company when it was seeing its first payback of the hard work of the team.

Mueller would be conducting a few townhalls over the next few days.

“I remain fully committed to do everything possible to facilitate the continuing turnaround of Malaysia Airlines and will continue this task for another six months in my executive position. The airline has been restructured and repositioned to regain its leading position as a national carrier we can all be proud of.”

It went through a global search for a CEO to steer the RM6bil restructuring. Mueller was chosen based on his successful turnaround of Ireland’s Aer Lingus and Lufthansa.

He was hired as Malaysia’s national carrier went through the trauma of the double tragedies of MH370 and MH17 that further amplified its dire financial and operational position. This subsequently led to a plunge in passenger traffic. MAS was described as “technically bankrupt” and declared net losses of RM1.3bil for its nine months to Sept 30, 2014 just before the airline was taken private.

Since helming MAS in May, he had wasted no time in giving it a “shake up” – he cut 6,000 jobs, slashed salaries and trimmed capacity by 30%.

The company has since gained a better footing, while its image had also improved.