April 28, 2016
Malaysia Airlines:What Mueller could not do
by Marion Tharsis
Khazanah Nasional Berhad probably expected too much from Christoph Mueller when it hired him to work his charm on MAS. Despite his glorious past, the turnaround expert probably didn’t count on the work culture and ethics and, most of all, the political environment in a government-linked company.
Mueller made all the obvious moves. He trimmed the work force, removed unwanted suppliers and closed unprofitable routes. What he could not do was remove political control. He probably learned soon enough that it would be futile to continue with his work, with so many hands pulling him from all sides to do their bidding.
Another person may try his or her hand at making MAS profitable again, but the same pressures will reduce the CEO’s position to that of a puppet to be manipulated.
So our once glorious airline is back to square one. The competition is overwhelming. Other carriers, including our very own AirAsia, are always looking into ways to make their companies more profitable through innovation.
We should not expect too much from the incoming CEO. He or she may be prevented from cleaning up certain kinds of mess. For example, he or she might not get a free hand to select a management team that would be capable of taking MAS on the path of good and solid governance.
An airline cannot run effectively merely on superficial changes. It needs an operating system that is smooth, unhampered, cohesive, innovative, customer focused, and competitive. Only then can it stay afloat in a tight and narrow market and play on a field that keeps re-inventing itself.
An airline that is subject to too much political control will keep failing and continue to be an embarrassment.
Marion Tharsis is a FMT reader.