Thai AirAsia’s Worst Profit Decline in 10 Years

AirAsia Airbus A320 9M-AFN Side view
AirAsia Airbus A320 9M-AFN Side view

Thai AirAsia will see 2014 as one of its most dreadful years as it will record the biggest slump in profits in 10 years of history.

The ongoing political crises in Thailand were said to be the major contributing factor of the decline. The company said it will focus more on domestic markets rather than international ones because international market recorded huge drop in profit compared to domestic market.

It does not seem to affect much of AirAsia’s operation in other region though, as indicated y AirAsia’s desire to launch AirAsia Asean Pass, which allows users to pick flights throughout Asean (Southeast Asian) countries using pre-purchased credits. With 137 routes within AirAsia network for Asean alone, users will be spoilt for choice, according to a news report from 3sixty, AirAsia’s travel magazine.

The announcement came in shortly after previous news article by The Star Malaysia highlighting its scucess as Asia’s Best and World’s Best Low Cost Airline by Skytrax for six consecutive years (2009 to 2014).

Malaysia Airlines Welcomes 100th Boeing 737 Aircraft

Boeing 737-800 Malaysia Airlines Delivery Ceremony (Picture Credit: thestar.com.my)
Boeing 737-800 Malaysia Airlines Delivery Ceremony (Picture Credit: thestar.com.my)

KUALA LUMPUR, December 22nd 2014 – Malaysia Airlines took delivery of its 100th Boeing 737 aircraft. Bearing the registration number 9M-MXY, the aircraft is painted with Malaysia Airlines’ new livery, consistent with other fleet of Malaysia Airlines Boeing 737-800s.

The aircraft was piloted by Capt Kamarozaman Ahmad arrived at Kuala Lumpur International Airport (KUL) at 2 PM on Monday and taxied towards Hangar 5 in the airport. A traditional water cannon salute is given to celebrate the arrival of the aircraft.

It first took delivery of a 737-200 in 1972 and has operated the -200, -300, -400, -500 variants of the Boeing 737. Currently, Malaysia Airlines focuses on taking delivery of Boeing 737-800, replacing all aging older-generation Boeing 737 in its fleet.

The aircraft uses Boeing Sky Interior. Malaysia Airlines is also Asia launch customer for the newly-designed interior, which features larger pivoting overhead stowage bins, LED lighting and larger window. Besides, it also has 15% better fuel efficiency compared to previous generation Boeing 737.

According to Malaysia Airlines’ chief executive officer (CEO), Ahmad Jauhari Yahya, the 160-seater aircraft includes better in-flight entertainment and larger pivoting overhead stowage bins.

Boeing 737-800 Malaysia Airlines Delivery Ceremony - (Picture credit: superadrianme.com)
Boeing 737-800 Malaysia Airlines Delivery Ceremony – (Picture credit: superadrianme.com)

New MAS CEO-designate: Who is Christoph Mueller?

Christoph Mueller - Picture Credit: thejournal.ie
Christoph Mueller – Picture Credit: thejournal.ie

Recently Khazanah Nasional, the Malaysian government investment arm, has made an unconventional decision to appoint a non-Malaysian, Christoph Muller into a top position of the new management of Malaysia Airlines (NewCo). The existing company (OldCo) will be abolished and its assets and operations will be transferred to NewCo. The new company (NewCo) that manages the airline will be named as Malaysia Airlines Berhad, replacing the loss-making existing company (OldCo), Malaysia Airline System Berhad.

We scoured the internet to find more information about our new Malaysia Airlines CEO-designate, Mr. Christoph Mueller. Below are some of our findings:

Career before Aer Lingus

While most of Malaysians are aware that Mr. Mueller comes from Aer Lingus, little is known about his previous career.

Christoph Mueller has a long list of credentials in aviation industry. Before his appointment to the board of executive management team in Aer Lingus, Mr. Mueller has held senior positions in big companies such as Daimler Benz Aerospace, Lufthansa AG, DHL and Deutsche Post AG. His previous role before appointment as the CEO of Aer Lingus is the Aviation Director at TUI Travel plc, a British leisure travel group (Source). He is also affiliated with Cosa Instrument Corporation (Source).

Appointment as Aer Lingus’ CEO

The German-born Christoph Müller (alternately spelt as Mueller) was appointed to the Irish airline on October 1st 2009 after its former CEO, Dermot Mannion resigned on April 6th 2009.

His vast experience in aviation industry has made him the right candidate for the position. This is necessary for the transformation of Aer Lingus, which had been embroiled in losses for three consecutive years, namely 2008, 2009 and 2010. Source

The transformation and success of Aer Lingus

In early 2000s, Aer Lingus was making good income, having scored four years of profitability from 2002 to 2005. However, it made losses from 2006 to 2008, leaving Aer Lingus an urgent need to transform itself and

Soon after his appointment, Mueller tried to solve internal problem within the company, which has resulted in unsuccessful negotiations with the worker’s union of the airline.

After Aer Lingus has entered the phase of profitability, Ryanair, another low-cost carrier popular in Europe, tried to acquire it. However the acquisition went unsuccessful due to several reasons such as opposition by company competition authorities.

Etihad, a leading Middle Eastern carrier, also partnered with Aer Lingus for codesharing, together with United Airlines, KLM, British Airways and Jetblue.

Next Step: Malaysia Airlines

Malaysia Airlines Boeing 737-800 at KLIA 9M-MXM 2014-09-21 08.33.02
Malaysia Airlines Boeing 737-800 at KLIA 9M-MXM 2014-09-21 08.33.02

The 52-year-old Mueller will start his new job at Malaysia Airlines from May 1st 2015. Analysts said it might be his toughest job ever, with Bloomberg.com describing it as “one of the toughest job in aviation” to lead a transformation effort of an airline that has lost two Boeing 777s with 537 passengers in just a year.

Mixed reaction can be seen from Malaysians. Some optimistic citizens voice out their support and solidarity with the restructuring plan while some others criticize the move. Among the ones who oppose the appointment is Malaysia’s former Prime Minister, Tun Dr. Mahathir Mohamad.

Mark D. Martin, the chief executive officer of Martin Consulting LLC said Mueller “may need at least six to nine months to familiarize himself with the company and the culture of Southeast Asia” – Bloomberg News.

Mueller is seen to be the right person to do the job because he managed to turn around Aer Lingus into profitability in just one year while facing stiff competition with the region’s leading budget carrier, Ryanair. Meanwhile, the similar situation can be observed in Malaysia. Malaysia Airlines has already struggled to stay profitable due to stiff competition with the region’s leading budget carrier, AirAsia.

Will Christoph R. Mueller Make Malaysia Airlines Fly Again?

Malaysia Airlines Boeing 737-800 2014-10-14 10.31.31
Malaysia Airlines Boeing 737-800 2014-10-14 10.31.31

Malaysia Airlines (MAS) airplanes are still flying, as of today. However, operating with losses for years is not a good choice for the ailing airline.

The Restructuring Plan of Malaysia Airlines

Months ago, Khazanah Nasional, Malaysian government investment arm has outlined a masterplan to resuscitate MAS and bring it to profit again (the complete PDF version of 12-point plan can be found here). Since then, there have been rumors on the appointment of a non-Malaysian as the CEO of the NewCo, the new company that is supposed to take over MAS, also known as OldCo in the restructuring plan.

Mueller From Aer Lingus to NewCo

On December 5th, Khazanah announced the name of NewCo CEO-Designate, Mr. Christoph R. Mueller. Mr. Mueller is already a huge name in aviation industry for his experience in bringing Aer Lingus back to profitability some time ago. His contract with Aer Lingus will end on May 1st 2015 but discussions are ongoing for him to start his jo at NewCo before that date but no earlier than March 1st 2015.

Aer Lingus was once marred with huge loss in sombre Irish market and has recorded loss for years. Mr. Mueller managed to turn the 78-year old Irish airline into profitability witin a year despite difficult market environment that time.

Additional Leadership Announcements

Dato’ Sri Mohammed Shazalli Ramly, current Director and Chief Executive Officer (CEO) of Celcom Axiata Berhad (Celcom), is appointed to the new MAS board as Non-Executive Director, effective January 1st 2015. Despite that, he will remain as the CEO and director of Celcom, a leading Malaysian telecommunications company.

Other positions announced including the one mentioned above:

  • Tan Sri Md Nor Yusof (Non-Independent Non-Executive Chairman)
  • Ahmad Jauhari Yahya (Managing Director/Group Chief Executive Officer)
  • Christoph R. Mueller (Non-Executive Director/CEO-designate of MAS NewCo)
  • David Lau Nai Pek (Senior Independent Non-Executive Director)
  • Tan Sri Dr. Mohd Irwan Serigar Abdullah (Non-Independent Non-Executive Director)
  • Mohd Shahazwan Mohd Harris (Non-Independent Non-Executive Director)
  • Tan Sri Krishnan Tan Boon Seng (Independent Non-Executive Director)
  • Tan Sri Datuk Amar Haji Mohamad Morshidi Abdul Ghani (Independent Non-Executive
  • Director)
  • Tan Sri Sukarti Wakiman (Independent Non-Executive Director)
  • Dr. Mohamadon Abdullah (Independent Non-Executive Director)
  • Mohd Izani Ashari (Non-Independent Non-Executive Director)
  • Dato’ Sri Mohammed Shazalli Ramly (Non-Executive Director)
  • Dato’ Fauziah Yaacob (Alternate Director to Tan Sri Dr. Mohd Irwan Serigar Abdullah / Non-Independent Non-Executive Director)

 

Response from Malaysians

Malaysians generally have mixed reviews with the appointment of Mueller. While many lauded that bld move to appoint a non-Malaysian in the top management of the new company, others see that a bit in a negative way and suggested that Khazanah should look into hiring a Malaysian for that post instead.

Malaysia Airlines has been known for its inefficiency, hence it has embroiled itself with years of losses. Other than inefficiency of aircraft and crew management, we were also shocked to learn about “intervention” by various parties with the ailing airline. As an independently-operated company, there should be no intervention other than the ones that are supposed to benefit the airline.

We also learned that MAS Employee Union (MASEU) has pledged its support to the new CEO-designate. We hope that other Malaysians will also support Khazanah’s noble intention to ensure the continuity of our flag carrier, Malaysia Airlines. In the meantime, some form of check-and-balance is required to ensure smooth operation of the new company, establishing the need for us to be more vigilant in supervising the new management team.

#FLYINGHIGH #KEEPFLYING

More information about the announcement can be found here.

MH17: Malaysia Accepted as Full Member of Investigation Team

Malaysia Airlines A380 9M-MNB at Charles De Gaulle Airport, Paris, France
Malaysia Airlines A380 9M-MNB at Charles De Gaulle Airport, Paris, France

Malaysia has finally been accepted as full member of criminal investigation that intends to find the real cause of downing of Malaysia Airlines Flight 17 (MH17).

The notification about Malaysia’s full membership of joint investigation committee is done via a letter dated November 28th sent by Dutch National Public Prosecutor’s Office. The letter was received by Malaysian Attorney-General, Tan Sri Abdul Gani Patail on Monday, December 1st 2014.

Flight 17, a Boeing 777 carrying 298 passengers was shot down by what is believed to be a high-velocity projectile in Donetsk, Ukraine. Donetsk is a region controlled by rebels in Ukraine.

Malaysian government is currently in possession of the flight voice and data recorder, which was retrieved after the incident by the rebels.

Source: The Star

New Celcom Lounge at klia2

Celcom has recently launched a new exclusive lounge at klia2, Kuala Lumpur International Airport (KUL). Other than the usual amenities, passengers will be able to pay their bills and ask about their roaming needs. The lounge is available for customers of the following packages:

  • Celcom First Elite
  • Celcom First for Business
  • Celcom First for Enterprise

 

Specialists from Celcom, also known as Celcom Telecommunications Specialist will be available to help users with:

  • Roaming needs
  • Bill payments
  • Travel tips

 

Amenities available include complimentary refreshments and snacks, internet access and luggage storage. Passengers can have discussions with the Specialists for their communication needs.

Unfortunately, prepaid users are not eligible to use the lounge. We think it might be good for Celcom to provide the lounge access to other Celcom users at a fee.

Celcom is a leading mobile telecommunications provider in Malaysia. It is part of Axiata Group, which also has business presence in Asia, primarily concentrating on Southeast Asia region.

klia2 is a low-cost, purpose-built terminal located in Kuala Lumpur International Airport (KLIA). Unlike Main Terminal Building (MTB), klia2 does not cater for full service carriers (FSCs). Although AirAsia is the primary airline for the terminal, other airlines utilizing klia2 include but not limited to Malindo Air and Tiger Air.

Source: Celcom website

Airbus A350XWB Asian Tour: Malaysia

Airbus A350XWB - (C) Airbus. Photo by J V Reymondon
Airbus A350XWB – (C) Airbus. Photo by J V Reymondon

A350XWB is a mid-size passenger airplane made by the famous European airplane manufacturer, Airbus. XWB in its name designation is eXtra-Wide Body,  indicating its advancement in widebody airplane manufacturing.

A350XWB uses Rolls-Royce Trent XWB engine, the largest turbofan engine (by fan diameter size) ever built for mass-produced aircraft. At 118 inch diameter, the fan diameter is even larger than those on A380 jumbo jet.

The only Malaysian airliner that placed firm order on A350XWB is AirAsia X, which sees the purchase of airplane fits well with their long-term strategy.

Recently Airbus A350XWB has made Malaysia as its final stop for its Asian tour. The airplane landed at KUL – KL International Airport (KLIA) and make a short turnaround flight the following day. Only selected crew members of Malaysia Airlines (MAS) and press were invited as part of this program.

Since we are not able to be there for our much-cherished A350XWB, check out some tweets by @Airbus account:

 

 

And on the next day:

 

 

After Malaysia, the A350XWB is now back in Toulouse, France. Toulouse is a city where the final assembly of most Airbus airplanes take place.

 

 

Involvement of Jurukur Bahan Antara in Airport Construction / Renovation Projects

Jurukur Bahan Antara, a cost consultation company has been involved with several renovation and construction projects at some of the airports in Malaysia.

Here are the details:

  • Proposed Construction of a New Terminal Building and Parking Apron at Sultan Ismail Petra Airport, Kota Bharu, Kelantan for MALAYSIA AIRPORTS SDN BHD (RM 52 million)
  • Proposed Construction of a New Terminal Building at Sultan Abdul Halim Airport, Alor Setar, Kedah for MALAYSIA AIRPORTS SDN BHD (RM 83 million)
  • Proposed Design, Build, Testing And Commissioning For Upgrading for New Large Aircraft (A380) Operations at KLIA International,Sepang, Malaysia for MALAYSIA AIRPORTS SDN BHD (RM 100 million)

Source: BQSM.gov.my website