MAS recovery plan still on track
CAPTAIN Izham Ismail says candidly that this is the first time he is doing a media interview in his 38 years of working for Malaysia Airlines Bhd. He does not show any signs of nervousness. In fact, he appears to be very relaxed and is quick to articulate his replies to the questions posed. He is determined to push the airline, the people and the vendors, as he has sustainability of profitability in mind. He speaks to StarBizWeek’s senior business editor B.K. SIDHU.
Excerpts of the interview:
Is the 12-point MAS Recovery Plan (MRP-2014) working?
I reviewed it and it is relevant. MAS has a set culture. I also grew with it and this is one of the challenges. We have to improve ourselves. We need to be agile and responsible and it is key to success. I have my own strategy focusing on five things, and it is in sync with the MRP to take the company forward.
We need to motivate, train and change the mindset of our staff and be agile.
A lot of work is needed on customer service as we have breakages.
There are inefficiencies in certain quarters of the organisation. Revenue and profitability is key.
We need to improve operational efficiencies, be it cost or fuel, and we will not compromise on safety. If the aircraft is unserviceable, we will not fly it, we will ground it.
What is your focus for 2018? There will be 800 new seats added to the region in 2018. Supply will exceed demand and yields will be impacted by 2% industry-wide.
Competition is intense and Malaysia is sandwiched between Singapore and Thailand. We need to strengthen KLIA as a hub.
Is there going to be job cuts in your cost-optimisation efforts?
We are selling seats, so our 14,000 employees are our ambassadors of Malaysian hospitality. We are all about Malaysian hospitality. I hope I can change the mindset of the team to be agile, united and banish all the silos, if there are still any.
I hope and feel confident we can cross 2018 and take the company forward, but I also cannot do it alone. Non-performers will be tough for me. I know so many by name.
I am watching and after 100 days, if you get a letter from me, that means you are not helping MAS deliver on its promise. You cannot be part of the team and have to leave.
There will be no downsizing, but I will focus on non-performance. However, a large portion of staff are performing and they are running around and working hard.
How is it sitting in the hottest corporate seat in Malaysia?
The job is not easy. A few days ago, I met (Tan Sri) Idris Jala, Ahmad Jauhari Yahya, called both Christoph Mueller and Peter Bellew to understand what is the main issue with the airline.
I realised MAS has a lot of challenges which are structural in nature and need to be strengthened. My focus is to make it structurally strong and my strategy will be in sync with delivering the MRP.
You were groomed to take over as CEO from Mueller’s time, but how prepared are you?
Given the circumstances, I did not want the job. I would be lying if I said I am not scared.
Then, I braced myself and told myself that if I don’t take it, I will regret not trying.
This company gave me a good life. I come from a poor family and I wanted to be an engineer. I studied hard and got scholarships to pursue engineering and become a pilot. I chose the latter because I wanted to lift my family out of poverty as soon as I could.
This company has personal and emotional connections as it gave me and my family a comfortable life. The majority of those who have worked for MAS have gained comfort from their jobs. I don’t want to go anywhere else and I am steadfast about paying back the company by turning this airline around.
Can you deliver a profit for MAS in 2018?
I have become the centre of gravity in MAS. Everyone is waiting for me to deliver. We are on track, but we have challenges too. There is intense capacity, there is yield erosion, and unstable forex and fuel costs. These are the contributing factors that will, and may, impact our progress in 2018 to profitability, or even break even.
How much of the RM6bil set aside by MAS’s parent, Khazanah Nasional Bhd, has been used to revive the airline?
Half was used for the staff separation scheme, as we reduced the workforce from 20,000 to 14,000 at present. We have not drawn any down during my time and we don’t expect to do so.