STEERING MAS OUT OF THE RED

Captain Izham Ismail has taken a big leap, moving from the cockpit of a plane into Malaysia Airlines Bhd’s boardroom as chief executive officer. Can he pilot the airline out of turbulence?

CAPTAIN Izham Ismail has been given a task billed as the “toughest corporate job in Malaysia”, given the events surrounding Malaysia Airlines involving MH370 and MH17 in 2014.

He is aware of the pressure of being the chief executive of the national carrier, given the public spotlight, and understands his task to turn around MAS, which has been a part of his life for 39 years.

Before he joined the airline as a pilot in 1979, he had a scholarship to pursue marine engineering in the United Kingdom, but decided on pilot training in the Philippines. The shorter course allowed him to return home earlier to work and help his family.

“I have two families, the airline and my own. I grew up with the airline. I’m paying back the life that MAS has given me,” he told NST Business.

He commanded his last commercial flight in 2012 on a 747200 to Heathrow Airport in London.

He is putting his piloting skills to the test in the boardroom as he sees similarities in flying an airplane and managing an airline.

“As pilots, we focus on carrying out the mission as efficiently as possible to the destination. We will encounter bad weather and challenges, such as air turbulence. We must circumnavigate and resolve problems on the fly. There is no one to help us. Pilots must take control of the situation.

“Likewise, when running an airline, we have to ensure the company operates efficiently and meets its goal, which is to drive revenue generation and sustainability. There will be turbulence and challenges that you need to navigate through.”

He said employees played a vital role in turning around the company’s fortunes.

Izham, fondly known as Ba’am at MAS, knows the names of 80 per cent of the airline’s employees and 40 per cent of their characters and family backgrounds.

MAS had 24,000 employees at one time, but that has been reduced to 13,000.

In the first eight months, MAS reported a reduction in its cost per available seat-kilometre, said to be the lowest among regional full-service carriers.

The airline improved its time performance by five per cent, reduced mishandled baggage by 25 per cent and saw a four per cent improvement in its customer service index.

It introduced new meal concepts, implemented split catering model, launched new lounges and made progress on social media.

Khazanah Nasional, its shareholder, had allocated RM6 billion to support the Malaysia Airlines Recovery Plan, including the five-year turnaround plan launched in 2014. MAS spent RM1.6 billion on delisting in 2014 and another RM1.6 billion on restructuring and retrenchment.

“2019 will continue to pose challenges in the marketplace, coupled with forex and fuel volatilities. We have to be nimble and fast. We can’t anticipate uncertainties, but we can put buffers around them.”

Izham said the airline had been showing progress and recorded a double-digit compound annual growth rate (improvement straight to the bottom line) since the establishment of Malaysia Airlines Bhd in 2015.

“Although that is not good enough to meet our 2018 target, we are mindful that it is a stretch target, which we will continue to drive this year and the next.” He said progress was on track until the company was hit by pilot shortage, unfavourable fuel prices and foreign exchange.

Pilot shortage meant it had to cut down on frequencies and network. But MAS recruited 144 pilots to solve the problem. Its fleet comprises 81 planes servicing 58 destinations, backed by 1,000 pilots.

He said the company would continue to be in the red this year, but its losses were expected to be half of last year’s RM812 million.

“That in itself is a turnaround.” Izham said one never stopped learning, especially in a corporate entity with lots of moving parts and exposed to market forces beyond predictions. “Do I know everything? No. I will continue to embrace challenges and learn to tackle them.

“Am I well equipped to run the airline? The answer is ‘never’, because there is so much to learn.

“In the aviation industry, every day is a different day. Profitability turnaround is not an overnight task. It will take time.”

Do I know everything? No. I will continue to embrace challenges and learn to tackle them.