Give Mueller free hand to run MAS - Dr Tan

Dr Tan, one of Malaysia's longest serving Members of Parliament, said AirAsia had become the icon among world's budget airlines because its Chief Executive Officer Tan Sri Tony Fernandes was able to run it with a free hand and on the basis of meritocracy.

"Tony Fernandes has a free hand in running AirAsia, that's why the airlines is successful. He operates (the airlines) on the basis of meritocracy," he told Bernama.

"If Tony Fernandes can, why can't Mueller? It's corporate management at the end of the day," he said.

Dr Tan said Mueller had a big job to do but he was convinced the German-born CEO was up to task and would succeed having previously turned around loss-making Aer Lingus and Sabena.

Mueller, initially hired to lead the new airline – Malaysia Airlines Bhd (MAB) effective July 1, took over from Ahmad Jauhari Yahya, ahead of schedule on May 1.

This accelerated leadership transition would provide Mueller to lead the overall MAS restructuring effort while preparing MAB to begin operations this September 1.

Dr Tan pointed out that all the conventional airline business was no longer conventional because it had changed drastically and airlines that did not change or adapt would not survive.

“Whatever needs to be done, has to be done. There is no point operating on routes and lose millions. If you are going to lose millions, you have to stop the bleeding. So how do you stop the bleeding? You see which routes are bleeding you dry and you cut those routes.”

Mueller in his first message to MAS’ 20,000 employees has said that this year would be more challenging than anticipated with massive cost cuts.

MAS’ cost level is 20 per cent higher than its peers and with sluggish demand in certain key markets despite higher discounts on ticket price, moving forward Mueller is planning for the airline to “retreat and regroup before growing again.”

In Dr Tan’s view, certain routes that are flown by MAS particularly domestic ones are not for commercial purposes but more as “social flights, adding, "Let’s separate the “social flights” from the company."

Khazanah’s 12-point MAS Recovery Plan will see the rationalisation of the national carrier’s network to be regionally-focused and with a strong global connectivity through its One World alliance.

MAS will withdraw its Frankfurt route this May 29 and analysts are anticipating more international route cuts namely Paris, Amsterdam, Istanbul, Dubai and Kunming.

“Anyway, MAS should from now on operate on meritocracy, full stop. We have got to help him (Mueller) along because you cannot have political interference.

“How can you have a company compete on international turf when your right hand and left hand are tied at the back. If you enter a boxing ring with your right hand and left hand tied, how are you going to fight anything anywhere?” he asked.