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5/9/2015 New MAS CEO warns of tough path ahead | Free Malaysia Today

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New MAS CEO

warns of tough path ahead



May 8, 2015

Christoph Mueller also warns of more job cuts ahead and says the situation is more challenging thatfirst imagined.

KUALA LUMPUR: The new CEO of Malaysia Airlines has told its employees that the troubledcarrier faces a more dire outlook than previously thought and warned of coming job cuts, saying thecompany does not have enough work for you.

The gloomy outlook from Christoph Mueller was contained in a memo to the stricken airlinesemployees dated May 5 and obtained by AFP on Friday.

The financial situation of MAS in 2015 is more challenging than we all thought and it is a call forswift action, wrote Mueller, who took his new position on May 1.

The state fund that controls the airline said last year it planned to slash 6,000 jobs, or about one-thirdof the workforce.

It also has said it would kill off unprofitable routes and make other wrenching changes to rescue acarrier facing possible collapse after years of losses and two devastating disasters in 2014.

Appointing a new CEO was a key part of the rescue strategy.

Mueller is a German national who had previously initiated a turnaround plan at Irelands Aer Lingusthat involved hefty job cuts.

He is Malaysia Airlines first foreign boss, replacing Ahmad Jauhari Yahya.

Since the new airline will be smaller in size, we simply have not enough work for all of you, hewrote, without giving further details.

Mueller appeared to echo the long-time assessment of aviation analysts that Malaysia Airlines was abloated firm.



The reason for our precarious situation is mainly our uncompetitive cost levels, which he said were20 per cent higher than its rivals.

He also said the majority of staff will be offered new contracts around June 1, saying packages forsome will be reduced, and others raised.

Responding to Muellers memo, the union representing Malaysia Airlines flight attendants said Fridayit planned to appeal to Prime Minister Najib Razak to prevent an aggressive retrenchment.

The National Union of Flight Attendants Malaysia, which also represents other cabin crews at otherMalaysian airlines, said the carrier should consider salary reductions rather than layoffs.

Lingering effects of two disasters

Malaysia Airlines had already suffered years of red ink and implemented a series of failed turnaroundplans before last years disasters struck.

In March 2014, flight MH370 disappeared with 239 passengers and crew aboard and remains missing.Four months later, flight MH17 was blown out of the sky by a suspected ground-to-air missile overUkraine.

Mueller told employees that some workers appeared rather depressed and that customers werecomplaining that service levels were deteriorating.

Malaysia Airlines previously had a good safety record, but the stigma of the tragedies has furtherpummelled its bottom line, necessitating the rescue plan.

Analysts have long blamed the airlines failure to compete on poor management, unwise businessdecisions, and government meddling in the legacy carriers direction.

The appointment of a foreigner has sparked some grumbling in Malaysia, but he called on employeesto pull together to save the airline.

But let me be clear, I cannot walk on water. What is ahead can only be achieved as a team, a strongteam, he wrote.

Please help me to get the job done.

- AFP

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