Malaysia Sets Up Malaysia Aviation Group; MAB Kargo to Apply for Own AOC

Khazanah Nasional Berhad, an investment arm of Government of Malaysia, has set up a global aviation group, called Malaysia Aviation Group (MAG), which will include the subsidiaries and businesses of the national carrier, Malaysia Airlines Bhd.
In a statement, Malaysia Airlines said MAG will have four distinct business units: air transportation services (ATS), ground services, aircraft leasing, and talent development.

MABKargo Airbus A330-200 freighter
MABKargo Airbus A330-200 freighter

Of the four units, ATS will be the largest contributing business segment, which includes Malaysia Airlines, FlyFirefly Sdn Bhd, MASwings Sdn Bhd, and MAB Kargo Sdn Bhd.
The latter is MAG's second largest income earner with revenue projections of 1.3 billion ringgit. "This division will apply for its own Airline Operating Certificate and will operate as a separate company as of 2017," Malaysia Airlines said.
The ground service and engineering segment covers AeroDarat Services Sdn Bhd, which provides ground-handling services in KL International Airport and 15 other airports across Malaysia, including ramp and cargo services, and MAB Engineering Services Sdn Bhd, which is involved in aircraft maintenance, repair and overhaul.
Separately, the aircraft-leasing segment will house MAB Leasing Sdn Bhd and MAB Pesawat Sdn Bhd. Both provide aircraft leasing services.
The talent development division will house MAB Academy, which provides education and training, and is expected to commence operations as an independent company in late 2016.

Creating separate profit centres
According to Malaysia Airlines, the new group structure will drive better transparency and focused management across the respective operating subsidiaries, creating profit centre subsidiaries of the company's separate businesses.
The carrier also said the new structure will increase individual companies' flexibility to explore collaborative opportunities and agility for capital raising opportunities, making the subsidiaries more competitive and responsive, strengthening the position of the group in its various markets and business segments.

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In search for a Mueller successor
Outgoing Malaysia Airlines chief executive officer (CEO) Christoph Mueller, who is also now MAG's CEO, said: "This will align structures and processes more consistently to the needs of our customer groups and raise the group's overall efficiency and focus, reduce complexity and increase decision-making speeds."
Long before the end of his three-year contract, Mueller unexpectedly announced his departure from the Malaysian carrier in April this year, citing "changing personal circumstances".
A Malaysia Airlines' spokesperson confirmed that Mueller, a German airline turnaround specialist, will still leave by September, and an incoming chief executive will head the new structure with the same board members from Malaysia Airlines in place.

Nol van Fenema

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