European LCC warrior succeeds Mueller at Malaysia Airlines

Malaysia Airlines Berhad CEO, Peter Bellew, is determined to maintain the pace of reform set by “airline crisis boss” Christoph Mueller, who resigned from the carrier nine months into his three-year contract “for personal reasons”.

September 1st 2016

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Christoph Mueller prematurely departed Malaysia Airlines Berhad (MAB), bound for Emirates Airline on July 1, two months earlier than originally planned, in a truncated resignation period that disappointed the airline reformists at the Kuala Lumpur-based flag carrier and also his industry fans. Read More »

In his place, after a three month global executive search, is the airline’s former chief operating officer, Peter Bellew (51). Irishman Bellew, who lists distance running among his hobbies, became MAB’s CEO on July 1. He is charged with getting Mueller’s reforms, aimed at returning the carrier to profit in 2018, across the finishing line.

His job will be difficult, although he is neither a newcomer to the airline nor a novice in managing airline staff and operations. His last job before he moved to Kuala Lumpur was director of flight operations at Ryanair, a carrier that has attracted controversy under the leadership of its founder, Tony O’Leary. Among the senior positions Bellew held at Ryanair was head of sales and marketing where he was credited with successful media campaigns that made a hefty contribution to the LCC’s sales.

He arrived at MAS as COO in January 2015, as the stricken carrier was preparing for its re-making under the 100% ownership of the country’s Khazanah Nasional sovereign wealth fund. In the previous March, MAS MH370, a B777 flight bound for Beijing from Kuala Lumpur, disappeared on March 8 – with the aircraft and all passengers and crew onboard yet to be found. A little more than four months later, the airline’s MH17 aircraft was shot down over the Ukraine, killing all onboard.

Former CEO Mueller, most recently the successful turnaround CEO of Aer Lingus, arrived in Kuala Lumpur a few months after Bellew. His new executive team, heavily weighted towards expatriates, launched Malaysia Airlines Berhad from the ashes of MAS on September 1 last year.

Mueller’s three-year program eliminated a third of the airline’s workforce, deep cleaned the fleet, canceled unprofitable routes, upgraded inflight service and terminated several overpriced third party provider contracts. And, it has been alleged in the media, annoyed quite a few locals who had been beneficiaries of the flag carrier’s gravy train.

Last February, MAB reported its first monthly profit for almost a decade. But then Mueller dropped his bombshell. A few weeks after the positive profit report, he truncated his three-year contract and announced his resignation because “of personal reasons beyond my control” from September 1. At that stage, he planned to serve on the airline’s board from September.

Rocked by Mueller’s decision, media critical of the airline said some MAB staff were not interested in improving the carrier’s performance or ridding it of suspected corruption. They alleged the last straw for the former CEO, who also criticized the work ethic of some MAB staff, was the return to service, without his knowledge or approval, of a B747. In a second shock, at least to the outside world, Mueller brought forward his departure from MAB to June 30. He is now Emirates Airline’s Chief Transformation Officer, in charge of digitilisation at the carrier.

In a July 8 interview, his first since he became CEO, Bellew said a challenge “would be managing the cultural differences of staff”. The fifty-one-year-old, who has a keen eye for economy at the carrier, emphasized saving money would not mean compromising on safety or the quality of the airline’s products and services.

To illustrate his determination to achieve its target of sustained profitability by 2018, Bellew said MAB would launch flights from Kuala Lumpur International Airport’s second terminal (KLIA2) next year because charges at the facility were lower than at the main terminal - by an average of $8.25 per passenger, or $1,350 for each flight.

“On one daily flight this simple saving will be $500,000 per annum. We will pass these savings onto customers with lower fares. Each and every cost of everything we do will be checked minutely each day without any change in quality,” he said.

There had been “great progress” in the past year at MAB, Bellew said. “Our first quarter showed performance indicators were on track. Yield was up 23.4%. Costs were down 32.9% and our bottom line is ahead of budget,” he said.

The airline had fuel savings of 10,000 tonnes in the first quarter of this year. “We will stop doing things that lose money. We will rebuild our relationships with the travel trade globally. We will lead a worldwide marketing initiative to promote the wonders of Malaysia,” he said.

“We will start routes from various Malaysian airports to new, unserved ASEAN (Association of South East Asian Nations) destinations. A new website, mobile app, trade reservations system and airport equipment will be in place in the next 12 months.

“The digital experience when booking with Malaysian Airlines will see significant investment in 2016-2017. From the choice of seats and the quality of the Nasi Lemak (a Malay fragrant rice dish cooked in coconut milk and Pandan Leaf) to time of travel, we should ensure the needs of each guest, with their different individual preferences, are met.”

The selection of Bellew as Mueller’s successor was near to guaranteed as he has played a critical role in putting in place the former CEO’s turnaround plan. As MAB chairman, Nor Yusof, said: “Peter has been a key figure in the airline’s senior management team responsible for executing the biggest and fastest transformation in our history. Peter’s appointment will pave the way for a smooth transition to ensure the continued success of our national airline.”

As the Dublin-based LCC’s director of flight operations Bellew oversaw 70 bases around Europe and a fleet of 320 aircraft. He is credited with creating a training organization for 600 new pilots, built employee representative council structures in 19 countries, opened 61 overseas bases and introduced new technologies to reduce costs across the airline.

A graduate of Trinity College, Dublin, he began his career in the travel business, ironically dealing with a very young Ryanair, and was the founder and CEO of Irish online travel agency, vbnets.com.

He was general director of Kerry Airport in southwest Ireland and managing director of Drive Ireland before he joined Tony O’Leary’s executive team in 2006.