The biggest challenge facing Malaysia Airlines is to regain the confidence of its customers in the wake of the MH370 and MH17 tragedies, the airline’s chief executive has confirmed.
Speaking to Bloomberg at the Singapore Air Show, currently underway, Christoph Mueller said the airline’s turnaround is overall on track.
The aim is to be back to profitability by 2018, and while Mueller was keen to stress that there are a number of factors at play that are outside the airline’s control, he was overall positive about achieving the target.
“Our biggest challenge is really to go back to the good old times,” he said.
“You are only as good as your customer thinks you are, we will be entirely customer-centric going forward. Most probably our biggest challenge is to regain our customers’ confidence.”
Although recent International Air Transport Association (IATA) figures showed aviation safety levels to be at strong levels, Mueller stressed that the industry must not “rest on its laurels”. With Malaysia Airlines’ own reputation for safety particularly damaged by recent events, he insisted it must go the “extra mile” to set its customers’ minds at ease.
“We do much more than the regulator requires because we have no credit left,” he said.
He also admitted that Malaysia Airlines’ product is a “little bit tired”, confirming that the airline will do a lot of work to bring this up to par over the course of the year.
Meanwhile, the airline has drastically cut its route network and grounded its entire Boeing 777-200 ER fleet as part of the turnaround plan.
“For 15 years, our network strategy was very much focused on traffic flowing from Europe to Australia. That traffic has gone to Middle Eastern carriers, we were not competitive,” Mueller said.
As a result, the carrier has reshaped its network to focus on emerging economies with strong GDP growth such as China. But Mueller did emphasise the airline’s commitment to start expanding its network once again once it is back in the black, hinting it was looking at some “very interesting stategic projects” involving new markets in the region, although he would not disclose specific details.
“Clearly we want to expand our route network once we have achieved profitability and more importantly once we have turned the company into cash positive territory which will also enable us to buy some aircraft back,” he said.
The airline is currently operating with a large number of lease contracts but will look to return to a “normal structure” as of 2018.
But Mueller stressed that simply “repairing” the troubled carrier is not the sole priority.
“That just would not be good enough,” he said, adding the focus will be on ensuring the airline’s is equipped to cater to the travelling public of tomorrow with a growing emphasis on digitalisation and innovation.
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