Friday, 8 May 2015

More Turbulence for Malaysia Airlines

There is hope for troubled Malaysia Airlines according top the new chief executive of airline, 
who said its financial situation is more challenging than anticipated and it will shrink in size as it tries to overcome a tarnished image with the industry and the public.

The Malaysian carrier has been hit hard recently, shocked by two disasters  - the first being the missing aircraft that just seems to have vanished on 8th March with 239 people on board. Then just four months later,the horrific shooting down of another aircraft over Ukraine by Russian agents claimed the lives of 298 people.

In a memo, Mr Christoph Mueller thanked Malaysia Airlines staff for a warm welcome but also noted parts of the organisation seemed "depressed" and customers were saying service is deteriorating. "Since the new airline will be smaller in size, we simply have not enough work for all of you," Mr Mueller said and plans to reduce the work-force by around 6000 people.  Mr Mueller advised they will soon send out termination letters as well as new job offers to those who will remain in the airline. 

The National Union of Flight Attendants Malaysia said the termination procedure as "obnoxious and arrogant". They said its 3,500 members were stressed and worried and were calling on Malaysian prime minister Najib Razak to step in and force the airline to reconsider.

One of the main aspects of this urgent new business plan will have to focus on cutting overall costs, which are up to 20% higher than its competitors, and withdrawing from markets where it cannot be competitive.  "Sometimes you have to retreat and regroup before growing again. And that is the ultimate target. We want to grow again in the last phase of restructuring," he said, adding the airline was "suffering badly from a heavily damaged brand reputation" in key markets with many people avoiding the carrier because "they are frightened".

The Malaysian flag carrier "must do things differently from the past", Mueller said and these plans will include new uniforms, a new single building, and a new process-driven organisation anchored by a new collaborative style of working culture.

"It is my duty to tell you today that the medicine is bitter and that the fitness programme which is required to bring us back into shape will cause a lot of sweat and sometimes tears. But it will be rewarding in the end."