Another abrupt MAS CEO exit: Consumer confidence shaken?

Recently news broke of MAS CEO Peter Bellew leaving the airline. The news, announced in an Irish media outlet first, caught many Malaysian consumers off guard as Bellew had only two weeks earlier, said that he was happy to be in Malaysia, and the turnaround of MAS would be the greatest achievement of his life.

Bellew was the second foreign CEO hired after a global search by Khazanah and the third CEO to leave the airline within three years. His predecessor Christoph Mueller also unexpectedly resigned last year. Both Bellew and Mueller exited the airline ahead of their contract period.

While Bellew is now all set to assume the role of Ryanair’s new chief operations officer, with his first task given in easing strains in the airline’s relationship with the pilots, many in Malaysia speculating on what led to his departure. His exit also comes at a crucial time for MAS as it is actively looking to make a turn around.

Bellew has over the past few months been fronted as the face of change for the once beleaguered brand, pushing its digital innovation agenda forward and championing restructuring. However communications players think that this latest departure, accompanied with the string of exits from the company will impact the airline's branding effort especially in the minds of consumers who are now educated and believe in brands with solid CEOs, Lars Voedisch, principal consultant and managing director of PRecious Communications said.

“The latest exit may be a concern in terms of trustworthiness among consumers,” he added.

Considering that the board will need to hire another CEO soon enough, having four CEOs in three years clearly sends a signal to the market that something is substantially wrong with the company’s wider leadership framework, Voedisch added. While this might not have a direct impact on customers, Voedisch said, "it will certainly affect staff morale, which one way or the other could have an impact on the service experience."

He said that in today’s world, airlines are more than simple hardware parts and flights routes. Customers are all looking at it as an overall brand experience. He added:

I’m concerned that for a company in a transition phase, the notion of continued instability will affect its trustworthiness among customers.

“So MAS’ board now has to act swiftly, yet it can’t rush into decision as the next CEO should hopefully stay longer,” he added. On whether Bellew's exit would impact MAS' branding effort, which indirectly can affect its bottom line’s revenue target, Voedisch said, "It’s too early to say as we will have to wait first on when and who will be appointed as next CEO and what his or her direction will be."

However, Voedisch also cautioned that, partners of MAS may get "very cautious" on long-term commitments now, as every new leader will have to adjust to the company's direction. As such, the brand “might have to fight fire on two sides” - with partners and suppliers who may want to get compensated for a perceived insecurity doing business with MAS; and with customers who may refrain from advanced booking of flights at this point of time as well for the same reasons.

Nick Foley, APAC president of Landor said, “For MAS, losing one CEO early into his tenure seemed unfortunate. Losing a second CEO so quickly, feels careless.”

He added that MAS “desperately needs to rebuild trust with its consumers” and the early departure of yet another CEO does nothing to build the airline’s credibility.

“A core tenet for any successful brand is that its target audience perceives it to be distinctive, desirable, engaging and credible. It would appear that MAS are following an unorthodox approach in the context of building a successful aviation brand,” he said.

He added that Bellow’s resignation was unexpected and MAS will now need to commence an extensive search for a new CEO.

This will only serve as a disruption for the airline and will set it back in its quest to become a fully profitable airline.