Malaysia's former prime minister Mahathir Mohamad talks to reporters at the conclusion of a conference on Yemen's industrial investment potential in the south-eastern Yemeni port city of Mukalla December 23, 2008.
Malaysia's former prime minister Mahathir Mohamad talks to reporters at the conclusion of a conference on Yemen's industrial investment potential in the south-eastern Yemeni port city of Mukalla December 23, 2008. REUTERS/Khaled Abdullah (YEMEN)
Malaysia's former prime minister Mahathir Mohamad talks to reporters at the conclusion of a conference on Yemen's industrial investment potential in the south-eastern Yemeni port city of Mukalla December 23, 2008. REUTERS/Khaled Abdullah (YEMEN)

Kazanah Nasional Berhad, the majority state-owned company that operates the embattled Malaysia Airlines announced on Saturday the appointment of Christopher R Mueller as chief executive airline. His designation aims to boost the business of the air carrier that suffered from two major air tragedies in 2014.

Former Malaysian Prime Minister Mahathir Mohamad appears to agree with the decision to name Mueller, a German, to head the flag carrier. In his opinion, "Malaysians are stupid. They don't know how to manage aviation," Malaysiakini, a news Web site, quoted the former PM.

Mueller is the current chief executive of Aer Lingus Group. His contract with Aer is until May 1, 2015, but Kazanah is discussing with him the possibility of starting earlier. Kazanah will nominate him to MH board on Jan 1 and to be its CEO by Feb 28, reports the Wall Street Journal.

YouTube/Astro Awani

Mueller has headed Aer Lingus since 2009, and Malaysian Airlines is hoping he would be able to replicate with the troubled air carrier what he did for Aer Lingus, which was to turn it around within 12 months of joining the company.

Mueller's task is to at least stop the continued financial loss of the air carrier, owned 70 percent by Kazanah, if not make it profitable. Malaysia Airlines had seven consecutive quarterly losses, which began even before MH370 disappeared with 239 people on board without a trace on March 8 and MH17, with 298 passengers and crew, was hit by a missile on July 17 while flying over Ukrainian air space.

Kazanah said it will suspend trading shares of the airline beginning Dec 15 as part of its $1.73-billion restructuring plan that would also involve firing 6,000 workers, reducing routes and having a new CEO.

Mr Mahathir added, "And now those responsible for the losses try to make things right."

In the 1980s, Malaysia Airlines was one of the most profitable air carriers, but by the 1990s started to log losses, which led Mr Mahathir to privatise it. Under the privatization, Tan Sri Tajudin Ramli, took out in 1994 a RM1.79 billion loan to acquire a 32 percent stake in Malaysia Airlines. He sold the shares for the same amount to Putrajaya in the aftermath of the 1997 Asian Financial Crisis.

Three more restructurings happened after that, costing the Malaysian government almost RM20 billion, but the air carrier continued to suffer losses, exacerbated by the twin tragedies in 2014. These proofs appear to support the former PM's observation about the lack of management skills by Malaysian executives to run their own flag carrier that a German has to be brought in.