Is there another airline with a more beleaguered recent history than Malaysia Airlines?
It’s not a common circumstance to broach 537 deaths in a boardroom interview but TW soon discover that not only does our subject know he has the toughest gig in the aviation industry, he is also more than open in addressing it.
Malaysia Airlines CEO Peter Bellew is surprisingly frank and humble about the challenges. He has been tasked with what he calls the “greatest turnaround in the history of aviation”.
Three years after the events, plenty of executives would wish to avoid the topic of the twin disasters of MH370 and MH17 and divert the public’s gaze to the future.
And while Bellew is indeed future-focused, he understands that the subject must be discussed. We had the question on the tragedies ready to ask, delicately, but Bellew addresses it first, unprompted, after a few minutes.
That’s the approach that he has instituted from the top down, permitting a culture of openness and sadness at the loss of 239 souls on MH370 and 298 souls onboard MH17.
“I think there was a period where we thought the past didn’t exist,” Bellew admits.
“I have met a lot of the people affected by MH370 and I met a lot of Australians affected. There is a hurt and a loss that we feel. Rather than pretend, we talk about it a lot.”
So, given these hardships, just why did Bellew become the CEO of Malaysia Airlines?
Bellew’s career trajectory began on the front line, managing the operations and logistics for the budget juggernaut that is
Ryanair before moving into the reputational management that comes with a sales and marketing chief role.
“Two of our most senior engineers at Ryanair had worked at Malaysia Airlines and were tremendous guys. They were well known throughout the industry. There is a great sense of brotherhood in the industry.”
Bellew was at a media lunch in Brussels when news came through about MH17.
“Knowing so many people at Malaysia Airlines, it had a personal impact on me and I was sorry for what had happened,” he says.
Some time later, Bellew was contacted by a recruitment consultant who wouldn’t give up on the idea of him as Malaysia Airlines’ top man.
He told Bellew: “You are the only person we know crazy enough to do the job.”
“It seemed impossible, but my mother, god rest her, had brought us up to believe that you should never take the easy road in life,” Bellew tells us with sincerity.
“If you have an opportunity to make a difference to people’s lives, you should.”
“I know this sounds esoteric and ridiculous, but that’s the way I was brought up.”
So here he is, in what he describes as taking the road less travelled. His early days in the role certainly required decisiveness.
There was discussion before and initially during his tenure about changing the Malaysia Airlines brand. A change of name,
flight code, uniform and colour were all floated.
“All to pretend that it was a new airline.” Bellew did not want to brush its legacy away. “It’s a new financial entity but there’s a heritage there and I think there’s a value to the brand and that’s been proven by the recovery.”
The recovery he speaks of is an improvement on years past. Figures like a 6% increase in advance bookings for six months year-on-year and load factor up 8% year-on-year.
There’s been a big jump in the second half of last year in particular. Business class improvements, for one, have lifted the carrier’s appeal.
And Bellew is happy to give credit to the Australian travel trade for the resurgent bottom line.
He even started his tenure with a personal apology for previous campaigns to divert airline bookings to the website.
“In the past we were throwing fares out there hoping the public would buy them.
“A couple of days after I got the job we recommitted to partnering with the travel trade to rejuvenate the business. The strategy under previous CEOs was around direct bookings.”
Malaysia Airlines has taken a 180-degree turn on that position, citing the sophistication of Australian travel agents.
“Now all our efforts are through the travel trade. A big part of Australia working well is that we’ve redoubled our efforts with the trade,” Bellew says.
That’s not to say there aren’t significant obstacles the airline must be agile in responding to. Namely, Qantas’s Perth
to London route. “Qantas has a clever strategy.
We had a lot of the business from Perth to ourselves so it will impact our operations – we’ll try to manoeuvre around the new departures and recreate our business out of Perth,” Bellew states.
“We’ll either enhance the product to Perth or stay where we are but do something on re-timing the flights to make the connections more favourable for the marketplace.”
But once again, the travel trade has played its part in assisting Malaysia Airlines.
“All the travel agency groups, their business is up in the first six months. The overall total revenue has gone up and the proportional earnings on airfares by agents have gone up.
“The travel trade has backed us and they are sending a lot of business our way.”
Despite this, Malaysia Airlines also faces stern competition on many of its routes from low cost carriers. Still, Bellew says, they don’t have the same penetration in the travel trade.
As for low cost carriers making a move towards relationships with the trade, Bellew is blunt. “You can’t be all things to all people.
“You can’t send me three messages over the weekend, hammer me everywhere directly, and then say that you want to do the travel trade thing. I don’t think anyone is buying that.”
In saying that, Bellew predicts that Scoot will be a heavy competitor for everyone in the aviation space in the next 18 months.
Moving to domestic issues, Bellew forecasts that Malaysia Airlines will operate fl ights from Brisbane, it’s just
a question of when.
“It’s early days. We don’t have the aircraft yet but we are in the process of getting the aircraft now.
“Sydney and Adelaide are performing strongly on an inbound and outbound basis. We’ve seen a resurgence of visitors from Malaysia. It’s a much improved picture for us.”
The airline has also invested in lie fl at beds in business class for all aircraft operating from Sydney, Melbourne and Adelaide.
“That has boosted the business class demand fairly readily.”
So, what of the future? Bellew is open about just how diffi cult the airline’s recovery has been. “It is incredibly tough and more complicated and nuanced than I would have believed. I have learnt more about myself over the last two years than
ever before,” he says.
Bellew is committed to the people of Malaysia, however. He describes them as family.
“If I can help the people out in Malaysia and get cost discipline I will be proud to have been part of it. Having forged through the terrible fi nancial challenges there is an amazing backbone in the people.
“There is an incredible unity and bond and that’s what will make the airline a great success.”
It turns out Bellew is from a place in Ireland close to the Blarney stone. The legend goes that when you kiss it you get the gift of the gab.
As Bellew shares, he is not shy in cross-examining travellers in airport queues about what they like and dislike. It’s fair to say he has brought an Irish joviality to the gig.
“I often tell the Malaysian people that they are a lost Irish tribe. They are Irish people with a tan but no Guinness,” he jokes.