New Malaysia Airlines CEO a “battle hardened” veteran

HONG KONG (AP) – When the owners of embattled Malaysia Airlines went looking for a new CEO to lead its restructuring, they chose a German turnaround specialist known as “The Terminator” to take on what’s been dubbed the toughest job in aviation.

Christoph Mueller, 52, comes to the post fresh from a stint reviving Ireland’s Aer Lingus. He’ll be the first foreigner to head the Malaysian state-owned company. Analysts say he’s an industry veteran “battle-hardened” from his work carrying out corporate restructurings at other state-owned airlines, including failed Belgian carrier Sabena.

Mueller will be facing his biggest challenge yet at Malaysia Airlines. The company was pushed to the brink of bankruptcy by the disappearance of Flight 370 on March 8 with 239 people on board and the shooting down mere months later of Flight 17 over Ukraine, killing all 298 passengers and crew.

Khazanah, the sovereign investment fund that owns Malaysia Airlines, declined an interview request for Mueller, who started his job on Sunday. But clues about his management philosophy can be found in a video interview he gave to Cambridge University’s business school last year.

“The first year of a restructuring is really like a war situation,” Mueller told his interviewer, exuding a polite, polished and firm manner that is in stark contrast with the brash charisma of the bosses at his former and present discount rivals: Michael O’Leary of Ryanair and AirAsia’s Tony Fernandes.

Mueller was dubbed “The Terminator” in Ireland because his German accent made for easy comparisons to Arnold Schwarzenegger in assassin robot mode as he outlined his plans to remorselessly fix Aer Lingus.

At his new job, Mueller will have work cut out for him. He has to trim a bloated workforce and money-losing routes while also fending off political interference at the state-owned company and battling cutthroat competition from budget carrier rivals. But that’s not unlike situations he’s faced before.

“I would say it probably is among the toughest” jobs in the industry, said John Strickland of JLS Consulting who believes Mueller’s status as an outsider will give him an edge in shaking up the company.

“He’s worked in a number of organizations, a number of airlines and he’s managed airlines that have had very diverse problems,” said Strickland.  “He’s coming in fresh. He’s someone battle-hardened in the airline industry. He’s not a political appointee.”

Mueller joined Aer Lingus five years ago, when passenger demand on lucrative trans Atlantic routes had plummeted in the wake of the global financial crisis while rising costs hobbled its competitiveness against European low-cost rival Ryanair. It also faced a yawning pension gap and multiple takeover attempts by Ryanair, which is now its biggest shareholder.

Mueller’s transformation of Aer Lingus gave him the chance to show that he’s got the mettle to perform major surgery on a previously state-owned airline without crashing it. His departure leaves the Irish carrier on a high note: it’s become an attractive takeover target for both Ryanair and British Airways parent IAG.

Mueller started his career at Lufthansa, but went on to jobs in areas of the aviation industry typically scorned by executives at big carriers, including in the low-profile air cargo and competitive air charter businesses.

At Belgium’s former national airline Sabena, Mueller struggled to save a company that was hemorrhaging cash and burdened with powerful unions that resisted job cuts. But his task was abruptly cut short by the Sept. 11, 2001 terrorist attacks, which dealt a fatal blow that forced it into liquidation.

In his Cambridge interview, Mueller expanded on his war analogy, saying that staff attrition may be high because workers aren’t used to the urgent tempo of typical turnarounds waged around the clock. Managers may need, for example, to “show up on Sunday morning at 4 o’clock at the baggage room, and really talk to people what their concerns are all about.”

He stressed the importance of town hall meetings with frontline workers and hinted that he usually ends up making sweeping changes to senior management because those responsible for existing problems tend to avoid taking responsibility.

“My experience is it’s very difficult to create a winning team from existing management,” he said. “There’s nowhere more obfuscation than in the boardroom at the beginning of a turnaround.”