Industry Observations from Nol van Fenema - Part 1

Malaysia Airlines CEO says speculation on MASKargo 'too premature"
The new CEO of Malaysia Airlines, Christoph Mueller, who started his work on May 1, said that the carrier's financial situation is more challenging than anticipated and that parts of the organisation seemed "depressed" and customers claim service is deteriorating.
In a memo to employees, dated May 5, he noted that Malaysia Airlines is "suffering badly from a heavily damaged brand reputation" in key markets, Mueller said that the carrier will move ahead with a previously announced overhaul that will involve cutting its staff by 6,000 or about 30 percent.
"Since the new airline will be smaller in size, we simply have not enough work for all of you," Mueller said.
Mueller disclosed that the airline will soon mail out termination letters and new job offer letters to those who will remain in the airline. That approach is being taken because staff requested privacy in the handling of employment matters, he said.
He pointed out in the memo that the airline's new business plan will focus on cutting overall costs, which are up to 20 percent higher than its competitors, and withdrawing from markets where it cannot be competitive.
Mueller noted that recent speculations on the airline offering for sale or lease all six of its Airbus A380s, two Boeing 747-400Fs and four Airbus A330-200Fs and four Boeing 777-200ERs  was "too premature when nothing concrete has been achieved.”
“MAS needs to operate and utilise its fleet at an optimum level besides maximising revenue on the route it flies,” he added.
Mueller said he envisioned a new airline that is "safe, on-time and friendly" that will be the new pride of Malaysia. He said endurance and faith are needed for the 6 billion ringgit (US$1.7 billion) turnaround programme that will take three to five years.

Alibaba Group replaces CEO
China’s e-commerce giant Alibaba has announced that, effective May 10, Daniel Zhang, currently chief operating officer of Alibaba, has been appointed CEO of the Alibaba Group.
Zhang, who has been with the Group for eight years and has held top management positions across the organisation, will replace Jonathan Lu, who will remain on the Group’s board of directors as vice chairman.
Zhang has been Alibaba’s chief operating officer since September 2013. In his role as COO, Zhang oversaw the operations of all Alibaba Group businesses in China and internationally.
Alibaba Group’s executive chairman, Jack Ma, said: “Daniel is a proven international business leader and innovator with a strong track record of delivering results. He has the confidence of our entire management team, and there is no better person to lead Alibaba Group as we embark on the next stage of our growth on top of the strong foundation that Jonathan helped build.”
In his new capacity, Jonathan Lu will play an important role in developing future leaders of the company. This role is especially important as Alibaba Group continues to build the necessary talent to enable the company to grow and thrive in a rapidly changing environment.
Alibaba Group’s revenue increased by 45% to RMB 17,425 million (US$2,811 million) in the quarter ended March 31, 2015, compared to RMB 12,031 million in the same quarter of 2014. However, net income in the quarter ended March 31 was RMB 2,869 million (US$463 million), a decrease of 49% compared to RMB 5,661 million in the same quarter of 2014.