Airline Leader Interview - Malaysia Aviation Group, Group MD, Datuk Captain Izham Ismail

Transcript

Adrian Schofield:We're very fortunate to have with us today the Malaysia Airlines Group Managing Director and Group CEO, Datuk Captain Izham bin Ismail.

Datuk Captain Izham bin Ismail:Thank you.

Adrian Schofield:I'm sure many of you will be familiar with Captain Izham's background, but for those that aren't, he became CEO of Malaysia Airlines in 2017 after a long and distinguished career as a pilot and senior executive at the airline. When he took over, Malaysia Airlines had, had been through a fairly rapid turnover in CEOs. And was really just at the start of its restructuring journey. But since then, Captain Izham has made many major improvements in areas like fleet, network, operations, culture, corporate structure, which really put the— made the airline a lot more resilient when the COVID-19 crisis came along and has led to a pretty remarkable financial turnaround that has the airline now poised for a return to net profitability. So anyway, welcome, Captain Izham, and thank you very much for joining us.

Datuk Captain Izham bin Ismail:Thank you. It sounds like an Oscar Award recitation. It's credit to the team, Adrian. I merely play golf on weekends.

Adrian Schofield:Well, I'm sure there's a little bit more to it than that, but OK.

Datuk Captain Izham bin Ismail:Thank you. Thank you for having me.

Adrian Schofield:Yeah, great.

Datuk Captain Izham bin Ismail:And nice to see peers and friends in CAPA this year in Kuala Lumpur, and I hope CAPA will continue to make this programme more regular in Kuala Lumpur.

Adrian Schofield:Great, yeah. I thought perhaps we could start by talking about the financial turnaround because it has been quite an amazing story. You did achieve an operating profit last year. Are you now on track for a net profit this year?

Datuk Captain Izham bin Ismail:Surely is waiting for this answer, the media team, right? Yes, it has been a fantastic 27 months, Adrian. We've been cash positive on a daily basis for the last 27 months. That spans out nearly 600 days operating profit last year, and we are on track to achieve net income after tax profitably this year as well. And we know we've got like 12 weeks left. The trend is looking very strong for us. This is driven by strong demand at the marketplace, elevated yield, and of course, a very well lean and agile balance sheet that we are able to restructure in 2020. Debt-to-EBITDA ratio is sitting at 48%. Our net gearing is at 1.09, and it's a strong foundation. as Malaysia Aviation Group move forward. Great.

Adrian Schofield:And just to gauge the significance of this, when was the last time that Malaysia Airlines had a net profit?

Datuk Captain Izham bin Ismail:Wow. I believe we had net operating profit in 2002, and subsequently 2006 and 2007. We've been on a checkered journey for the last 2 decades, and we hope We're moving forward with a restructured balance sheet, which is lean and agile now, a very productive, efficient organisation as we speak today. I'm confident Malaysia Aviation Group will be an airline that you should put your bet on in the next 5 to 10 years.

Adrian Schofield:Great, okay. And that does lead into my next question. I know you're certainly helped by the high-demand environment at the moment, but to what extent is the newfound profitability sustainable in the long term once maybe that Demand eases off a little bit?

Datuk Captain Izham bin Ismail:Good question, Adrian. Fortunately, the industry has been operating in the high-yield environment for the last 2 years, and we forecast that demand will remain elevated at least until end of Q2 next year. As we speak, capacity in Asia-Pacific region will return to normalcy at 2019 level by end of this year. However, our forecast of RPK will probably recover back to 2019 level at the end of 2024. Yield would probably ease at the beginning of Q3 or thereabout in Q2 of 2024. From our forecast, it will continue to be better than 2019, at least at a circa of 8% to 9%. on yield for Asia Pacific in total. But this is a crystal ball. You look puzzled.

Adrian Schofield:No, I'm not puzzled, just interested. Puzzled is my natural expression.

Datuk Captain Izham bin Ismail:I wish yield can remain at 24%, but realistically, yield will neutralize itself. As we progress in the next 12 months.

Adrian Schofield:Right, okay. And what about capacity, both on an international and domestic basis? What's that running at?

Datuk Captain Izham bin Ismail:As I said, for Malaysia Aviation Group itself, we will attain 93% capacity versus 2019 by end of this year. For the Asia-Pacific region, we anticipate that capacity will be back to normal by 2021. 2023, this year, and RPK will probably normalize itself by end of 2024.

Adrian Schofield:Right.

Datuk Captain Izham bin Ismail:So there will be capacity, but traveling public, traveling passengers will probably come back to normalcy in end of 2024. That's, I would say, pessimistically. Optimistically, I hope it will be earlier, that consumers continue to fly. Right.

Adrian Schofield:So given the turnaround, in what ways do you think Malaysia Airlines is structurally a lot, a lot sounder now in terms of financial performance?

Datuk Captain Izham bin Ismail:Malaysia Aviation Group, previously known as Malaysia Airlines, has been laden with a very unfavorable balance sheet. It's very stiff and unable to be agile. Fortunately, in 2020, we, in any adversity, Adrian, we were quick to realize there's an opportunity for us to work with our partners, our creditors, a total of 75 of them. I give credit to all of them for trusting and believing us. We were able to reset the balance sheet, removing about $15 billion of our liability, taking away about $10 billion of our debt. That makes Malaysia Aviation Group today lean and agile. We have lots of room for us to move in the context even with a very unstable macroeconomic condition. As you know, in the airline business, and my peers are here, somebody sneezes in Iceland, the aviation industry goes a bit of tremors all over the world.

Adrian Schofield:Yes.

Datuk Captain Izham bin Ismail:So I'm confident that with the current balance sheet The efficiency that the organisation has transformed itself, it's fit for the future.

Adrian Schofield:Right, okay. And you just touched on this a little bit, but in terms of macroeconomic trends, are you sort of seeing any clouds on the horizon, both for Malaysia Airlines and for the broader industry that might—

Datuk Captain Izham bin Ismail:My crystal ball remains blurred. Honestly, but on the serious side, fuel, forex, and interest rate is a major concern. Fuel will remain, I believe, this is the new standard. It's normalized itself, will probably stabilize at this circa high 80s. Of course, there again, it may change tomorrow. It just last 5 days, the Brent moved $5 in just 5 days. It's just being so erratic. Forex, yes, for Malaysian-based companies, this is actually a concern, the weakening ringgit. But most importantly, for Malaysia Aviation Group, we're taking deliveries of new aeroplanes as we progress. Our biggest concern is not too much on fuel and forex, but on interest rates. The minute you have entry into service of new aeroplanes, your interest rate will hit you clearly, especially if you take these aeroplanes on operating leases. Forex for Malaysia Aviation Group, we are fortunate. We are a network carrier. that operates globally. We do sell our businesses overseas, so we kind of have a natural hedge for Malaysia Aviation Group. For fuel, we are currently hedged at 22%, cautiously looking at our forward hedging. In 2024, we currently hedge at first quarter about 8%. We will continue to position ourselves on the hedging strategy. Previously, Adrian, just coming out from COVID nobody wants to help us hedge because unknown. But today, with our current financial performance, we are very happy that financial institutions have actually given us the vehicle for us to hedge fuel. That kind of cushioned the impact to Malaysia Aviation Group. And of course, forex is— we have to keep an eye on it. It is really unsettling to see the ringgit weakening. As I said again, fortunately, Malaysia Airlines operates— is a network carrier, so we're not totally dependent on US dollars per se. No doubt that 48% of our cost is actually US-driven.

Adrian Schofield:Right, okay. Could you talk about which markets have recovered most strongly for you and maybe where the recovery is a little slower? For example, paying attention to the China market in particular.

Datuk Captain Izham bin Ismail:Good question. Just like my peers, Ben and Leslie, our bet is on India. For us, Malaysia Aviation Group, New Zealand, of course domestic has come up, but domestic is more of a leisure market movement. Australia, Europe, India is very interesting. It is showing capacity surpassing 2019 level. Malaysia Aviation Group itself, we are operating 60 times a week now to India. We've launched— we are launching next week Ahmedabad, Trivandrum, and Amritsar. No doubt that bilateral issues with regards to metro cities will be a bit tough for us. Henceforth, we are looking at other points of India. China, a bit disappointing. However, the domestic movement in China has been very strong. It surpasses 2019 level by, I believe, 8% to 10%. The outflows coming out from China is somewhat disappointing. What we see in the movement of China is primarily driven by slightly moderated economic movement and unemployment rates. Unemployment rates in China has increased. Probably that is causing, triggering the lack of movement of international travelers going out of China. So our bet is still India, most part of South Asia, and most part South Asia and Australia.

Adrian Schofield:Right.

Datuk Captain Izham bin Ismail:Europe remains strong for us because we have a strong partner with Qatar. We operate 3 times to Doha as we speak, and that has actually induced a network flow for Malaysia Aviation Group via Doha. But as a national airline, we remain steadfast to rebuilding Kuala Lumpur as our international hub to be one of the strongest in Asia-Pacific. No doubt we have a long way to go. to rebuild KLIA. But yes, India, but I'm kind of putting my bet slightly later for China, probably end of Q2.

Adrian Schofield:Was China your biggest market before the pandemic?

Datuk Captain Izham bin Ismail:Previously, in the context of Malaysia Airlines, we served 70% of our capacity into China. So today, we are doing around 10%. Only on the major cities like Beijing, Shanghai, Pudong, and Guangzhou. So we're not expanding beyond that at this current time.

Adrian Schofield:Yeah, so a long way to go.

Datuk Captain Izham bin Ismail:Yeah, right.

Adrian Schofield:Okay, great. And I know all airlines have had recovery sort of speed bumps and bottlenecks as we've come out of the pandemic. And I guess a challenge for you has been with the in-flight catering. Oh, are we going there? If you don't mind. So I was wondering if you could talk about what progress has been made on the in-flight catering area. So what the situation is now and what further changes you might expect.

Datuk Captain Izham bin Ismail:Did you fly Malaysia Airlines?

Adrian Schofield:Not this time, but I have many times.

Datuk Captain Izham bin Ismail:So you didn't experience the food then?

Adrian Schofield:I have before. I know it is very good.

Datuk Captain Izham bin Ismail:All right. Well, briefly, we are 97% to normalcy. We will be back to normal catering and F&B on our services by 15th of November. It has been a tough journey. And, you know, Adrian, when you run a business, you need to really be focused on what your objective is. Catering is not our core business, but customer experience is. So if you work backwards, then catering becomes our problem. So we have to find ways for us to reset our product on board the aeroplane. That entails going through a very painful journey, but I would commit ourselves and trust us that coming out from this, you will see better F&B product on our services. We're looking at launching ASEAN menus. Malaysia Aviation Group is not only— Malaysia Airlines is not only serving Malaysia. Our aspiration is to be a premium Asia-Pacific airline. So we have to depict the beauties of ASEAN and Asia as well, but remain steadfast and pivoted on being a Malaysia Airlines-based airline. I actually kind of circumnavigate your question, you realize that? On catering?

Adrian Schofield:I think you addressed it, yeah.

Datuk Captain Izham bin Ismail:Yeah, I did, right?

Adrian Schofield:And it is good to hear about that November 15 benchmark coming up.

Datuk Captain Izham bin Ismail:Yeah, you should fly Malaysia Airlines and give me your feedback.

Adrian Schofield:I would.

Datuk Captain Izham bin Ismail:How would the food be? So we have about 8 caterers now supplying us.

Adrian Schofield:Right, right. And you have the high-lift trucks and everything that you need?

Datuk Captain Izham bin Ismail:Yes, we have all the high-lift trucks, 24 of them, that just arrived about a couple of weeks ago.

Adrian Schofield:Great.

Datuk Captain Izham bin Ismail:And we are good to go. And 15th November, you see, we are back to normal.

Adrian Schofield:Excellent.

Datuk Captain Izham bin Ismail:Thank you.

Adrian Schofield:Are you striking any other impediments to the recovery process? Sort of like airports, supply chain?

Datuk Captain Izham bin Ismail:Yes. Supply chain has been an issue, especially spare parts. Infrastructures of airports does give concern, and I know there is a bit of work that MAHB is undergoing, and I'm confident they will get us through. But most importantly is unavailability of getting slots. Primarily, region like Indonesia, slots has been very restrictive. India, of course, all of us know, is bilaterally driven. And other than that, I believe airports all over the world that Malaysia Airlines operate to is coming back to speed. And I'm confident MHB will get us across in the next couple of quarters.

Adrian Schofield:Great.

Datuk Captain Izham bin Ismail:Okay.

Adrian Schofield:And turning to fleet perhaps, something I'm always very interested in, can you give us an update on when the first 737 MAXs are coming in?

Datuk Captain Izham bin Ismail:Oh, don't go there, Adrian. I'm so disappointed, actually. Right.

Adrian Schofield:And how's that been affecting you?

Datuk Captain Izham bin Ismail:On record, I am very disappointed with— anybody from Boeing here? No, fortunately, right? Yes, I am very disappointed, Adrian, with the with the delivery progress of our 737 MAXs. Contractually, we're supposed to receive 7 aeroplanes this year, and revised contract delivery is 4 this year. As we speak, I honestly don't know when this aircraft is coming. It has been delayed for the last 2 and a half months. As we speak, last night, the brief that my team gave me, the date that they put on, they informed me that it's coming on a certain date, And they do not have 100% commitment. So I am disappointed, honestly. And probably that will lead you to the next question of our future narrowbody program, correct?

Adrian Schofield:Yes, that will relate to that question.

Datuk Captain Izham bin Ismail:I have a good crystal ball of you now.

Adrian Schofield:Yeah, okay.

Datuk Captain Izham bin Ismail:Yes, so we have a remaining order for our fleet growth program for the next 10 years up to 2030. We're looking at a size of about 60 narrowbodies, and that gave us a second batch of narrowbody that we have to order. And the RFP will go out early Q1 next year with the delivery expected that we plan to accept this airplane into service by 2028.

Adrian Schofield:Right.

Datuk Captain Izham bin Ismail:We are agnostic to aircraft type of what we have gone through for the last few months. So we're open to Airbus A220 as well. That's your question, right?

Adrian Schofield:It should be, perhaps.

Datuk Captain Izham bin Ismail:So now, you know, to a certain extent, Adrian, you know, what's wrong with COMAC, a Chinese-produced aeroplane? So it's really interesting that Malaysia Aviation Group has always been steadfast of going towards the unknown for the last few years. And we remain clear, as long as the fleet meets our mission, our vision, and our aspiration commercially favourable to Malaysia Aviation Group, we'll go with this aircraft type.

Adrian Schofield:Right. And this again is the second part of the order that will replace your current narrowbody fleet.

Datuk Captain Izham bin Ismail:Yes.

Adrian Schofield:And it sounds like you are still open to perhaps making part of that regional jets.

Datuk Captain Izham bin Ismail:Oh, yes. We are agnostic to aircraft type after what we've gone through for the last few months.

Adrian Schofield:Right. Okay.

Datuk Captain Izham bin Ismail:I want to make it clear. Suli can pick it up there. Suli.

Adrian Schofield:Okay.

Datuk Captain Izham bin Ismail:The media team is there, right?

Adrian Schofield:On the widebody side, when are your first A330neos supposed to be arriving?

Datuk Captain Izham bin Ismail:The first A330neo is scheduled to arrive in September next year, 2024. We have ordered 20 A330neos, and we still have options on the table, the remaining 20, and we will make that decision next quarter as well, Q1 2024. If we follow or we remain steadfast with our long-term business plan that maps us out until 2030, we should be having about— we should have about at least 55 widebody aeroplanes in the future.

Adrian Schofield:Right, by 2028 onwards. Yeah. Right, okay, right. And that'll be a mix of A330neos and A350s? Yes.

Datuk Captain Izham bin Ismail:So I believe your next question, the last time we have a conversation in Istanbul, You're asking whether I'm going— are we going to take in more A350s? The answer is yes. We're bringing in the next A350, one more next week. It will be operational in December. And we have— we are actually actively at market looking for 3 more A350s.

Adrian Schofield:Yeah, leased.

Datuk Captain Izham bin Ismail:Of course. Yeah, yeah, yeah.

Adrian Schofield:Okay.

Datuk Captain Izham bin Ismail:You have any, any lead for me?

Adrian Schofield:I'll keep my ears open for you.

Datuk Captain Izham bin Ismail:Thank you.

Adrian Schofield:And with this, all the new widebodies coming in, what does that mean for your cabin refresh project? Because I know this has been a big priority of yours.

Datuk Captain Izham bin Ismail:Yes. So we are very excited with the low-par or the seat design of our A330neos. And once that comes in, our A350 will slowly be retrofitted to be aligned with the A330neo. so that the customers see a seamless journey, no differentiation of product. Adrian, the checkered journey that Malaysia Airlines has gone through for the last 2 decades, we did not have enough funds to reinvest into the business, to reinvest to our customers. Today, we are in a better position. We are reinvesting. Retrofitting the A350, A330neo, the new low-par is very exciting. We also have initiated and embarked on the retrofitting of our 737NGs, and the MAXs will come in with a new seat configuration, seat design, so to speak.

Adrian Schofield:Yeah, right.

Datuk Captain Izham bin Ismail:For us to be a premium player, we need to work a lot on our product. And we're very clear, Adrian, that Malaysia has too many airlines. We're smiling with each other, right?

Adrian Schofield:Yes.

Datuk Captain Izham bin Ismail:But we're very clear, Malaysia Airlines in Malaysia per se, and in the ASEAN region specifically, there are 2 products. There are 2 segments of customers, premium and low-cost and digital travel. So we know that For Malaysia Airlines to be profitable, we shouldn't be competing with low-cost carriers. So there are segments for low-cost carriers. So what Malaysia Airlines needs to do is clearly focus on the segment that we are good at. So that's why Ben and Riad have not been competing with you for ages already.

Adrian Schofield:And that does lead into my next question. I was going to talk about the grounding of my airline, And perhaps what that signifies about the Malaysian market. Is there room for more carriers in the Malaysian market?

Datuk Captain Izham bin Ismail:Adrian, this soundbite that I've made since 2019, and the most recent one was, I believe, January 2022. Malaysia is plagued with overcapacity, serving 32 million population. That's 1.75x seat ratio. I believe very strongly that overcapacity in domestic Malaysia is an issue. If you want airlines to be profitable and reinvest back to regenerate the economic position of the country, you cannot establish airlines that race to the bottom. It's very key. You know, when airlines race to the bottom, not only the airline shuts down, loss of jobs, suppliers, the economic chain reaction is very key. I call upon the policymakers to be really steadfast of really managing capacity effectively, especially when new airlines Would like to— you know, Adrian, there's a joke that I always tell friends and colleagues and peers. If you are a billionaire and you aspire to be a millionaire, open up an airline.

Adrian Schofield:Right.

Datuk Captain Izham bin Ismail:It's a razor-thin margin business.

Adrian Schofield:I can see where you're going with that one.

Datuk Captain Izham bin Ismail:Yeah, I'm not a billionaire in the first place.

Adrian Schofield:Right, okay. That is a very apt comment. Again, on the local market, can you talk about what your plans are for operations at Subang Airport? I know this has been talked about a lot, and perhaps a little bit about what sort of challenges it will present operating a 2-airport system for Kuala Lumpur.

Datuk Captain Izham bin Ismail:My minister is not here.

Adrian Schofield:Good.

Datuk Captain Izham bin Ismail:Yes, Malaysia Aviation Group remains supportive of the policy, of the, of the government of Malaysia aspiration to establish Subang Airport, the regeneration program. However, it is important that policymakers, industry players must sit together to ensure that we do not cannibalize KLIA too much. KLIA, it is today, it is not that strong international hub. So if we were to have Subang, it may degrade the position of KLIA. So the strategy of frequency-neutral or capacity-neutral versus Subang and KLIA need to be really, really looked into. And the product that Subang Airport is supposed to deliver should not in any way cannibalize KLIA to a certain extent. But in reality, Adrian, there will be cannibalization.

Adrian Schofield:Yeah.

Datuk Captain Izham bin Ismail:There will be cannibalization depending on the extent of the Subang Airport operation. However, in summary, executive summary, Malaysia Airlines remains steadfast to support the aspiration of the regeneration of Subang Airport, Subang catchment area. Right, right.

Adrian Schofield:Okay, very good. And changing tack again, I know another very important focus for you has been on airline partnerships.

Datuk Captain Izham bin Ismail:Oh, airline partnerships.

Adrian Schofield:During restructuring, I know you've leaned more heavily on airline partnerships. Can you talk about the importance of those partnerships and what are the most key additions you've made in that area?

Datuk Captain Izham bin Ismail:Adrian, airline partnership is one of our key strategic focus in our business. It contributes close to 27% of our top-line revenue. We have today active deep codeshare partners, more than 35. In our long-term business plan, this is pillar number 3, deeper partnership with our airlines, not only airline, non-airline as well. So it remains as key to us, Adrian.

Adrian Schofield:Great.

Datuk Captain Izham bin Ismail:Yeah. And I guess your next question is to ask me about Cathay Pacific, right?

Adrian Schofield:Yeah, I was going to ask about that, actually. Well, you know me too well.

Datuk Captain Izham bin Ismail:Let's change seats. I'll sit there and you ask me.

Adrian Schofield:You always make my job easier.

Datuk Captain Izham bin Ismail:Yes. Unfortunately, we were not successful in our application for joint business with Cathay Pacific. But Adrian, that will not stop us. We have other pathways with airline partners that we're looking and having conversation on joint businesses. And it is very important that the incremental revenue that we have been enjoying post our joint business with Japan Airlines has been superb.

Adrian Schofield:Right.

Datuk Captain Izham bin Ismail:This is not something new that Malaysia Airlines invented, per se. We look at New Zealand, and New Zealand is a small little tiny island with very minimal domestic market, but they're profitable.

Adrian Schofield:Yes.

Datuk Captain Izham bin Ismail:The strategy that they have deployed for the past many years is joint business. That's a strategy that Malaysia Aviation Group is emulating, and we hope we will get more joint businesses into our our environment as we move forward.

Adrian Schofield:Very interesting. Can you give us any hints of which markets you might be looking at for that?

Datuk Captain Izham bin Ismail:Where are you from? New Zealand, right?

Adrian Schofield:Yes.

Datuk Captain Izham bin Ismail:Maybe. No, yes. First and foremost, strategically, we bucket ourselves, we call ourselves, we have this Golden Triangle in the ASEAN region bordering South Asia and North Asia, and of course Australia. We have 2 global markets, Far East and Europe. So our partners must be able to support us in those 3 regions, on those catchment areas that we spoke about.

Adrian Schofield:Right.

Datuk Captain Izham bin Ismail:Of course, first and foremost, when you make an application for joint business, you have to give confidence to the regulators that this is not— you will not end up as a monopoly. Certain elevated market share to a certain extent.

Adrian Schofield:It's interesting that you're not sort of alliance— tied to alliances, are you? You're prepared to look outside the alliance?

Datuk Captain Izham bin Ismail:No, honestly, we are fortunate that Oneworld Alliance is quite— they are quite open for you to do side deals, per se. But we remain steadfast. Most of our focus is actually to add value to Oneworld. And as you can see, most of our deep codeshares are with Oneworld partners. But that does not discount us doing deeper codeshares with non-Oneworld, outside of Oneworld alliances.

Adrian Schofield:Right, okay. We're unfortunately starting to run out of time, but there are some more key questions I would like to ask you if people can bear with us a little. I'd like to ask you about workforce. I mean, it has been a big topic for the aviation industry broadly. How are you placed for your workforce pipeline?

Datuk Captain Izham bin Ismail:So we put a bet in 2020, and we remain steadfast that we will not retrench any staff during COVID The organization took a pay cut right from the board down to the lowest senior managers in the organization that supported the lower-income group. And we didn't put our aeroplanes on hold. on long-term parking because we knew that it will cost us a lot of money when we bring the aeroplane back in. So we put the aeroplane on active parking instead.

Adrian Schofield:Right.

Datuk Captain Izham bin Ismail:That means every 3 days it will fly, even for Kuala Lumpur to Penang and back, it will fly. So it was on active parking, and that actually kind of like made us financially stronger in the sense that we don't have Unnecessary cash outflow to bring the aeroplane back from long-term parking. Workforce, we had that workforce, but with this growth mode, with our diversified revenue stream of MRO, we do have issues at our maintenance MRO facility on resources. Admittedly, yes. But we are quite stable in the context of crewing, pilots and cabin crew. Our ground staff, frontline staff is handsomely staffed, but our acute issue now we are facing is actually our maintenance engineers and technicians.

Adrian Schofield:Okay, I do have a couple of very broad questions to finish on a fairly upbeat note. So first of all, looking back at what has been a pretty remarkable turnaround at Malaysia Airlines, What aspect of that are you most proud of?

Datuk Captain Izham bin Ismail:I am proud of the entire team members in Malaysia Aviation Group. It demonstrated resilience and clarity of purpose in the organization. We took risks, even the restructuring in 2022. ability to see and capture opportunities. And it is a different organization today. Their speed to market is very fast. Execution of strategic initiative is fast, with a clear mind, what's the endgame. So to recap, Adrian, I'm proud of the entire 12,000 people in Malaysia Aviation Group.

Adrian Schofield:Thank you.

Datuk Captain Izham bin Ismail:It demonstrated resilience. A company that has gone through I would say many crises. I mean, as far back as 2014, if you— I would not want to mention those 2 incidences. So it is an organization which is made of crisis, made of metal, per se.

Adrian Schofield:Yeah.

Datuk Captain Izham bin Ismail:Yeah. We are not Superman. We are just human beings. But the unity of the organization has made us where we are today.

Adrian Schofield:Great.

Datuk Captain Izham bin Ismail:Okay.

Adrian Schofield:And, you know, the turnaround has come a long way. But I'm just curious to know, you know, looking ahead, what are the key areas that you still want to achieve for Malaysia Airlines to achieve your vision for the company?

Datuk Captain Izham bin Ismail:So, Adrian, as we speak today, my turnover— our turnover is RM12.5 billion. Our aspiration is RM24 billion by 2030. We aspire, our ambition to be top 5 airline in Asia Pacific. and top 10 airline in the world.

Adrian Schofield:In terms of customer experience?

Datuk Captain Izham bin Ismail:Customer experience, yeah. So great future ahead, led by strong foundation today, a very lean and agile balance sheet, a strong cash balance, and an agile workforce driven by execution, swift execution. You know, Adrian, we even have weekly KPIs for certain units.

Adrian Schofield:Weekly?

Datuk Captain Izham bin Ismail:Yeah, and our employees are measured quarterly now, not yearly anymore. So everybody's running for the same purpose of— you know, Malaysia Airlines is not only an airline, it's a symbol of what Malaysia is. It's an idea that was mooted 22nd November 1922, an idea by our forefathers that Tana Malayu Malaya, at that time it's called, it's not called Malaysia or Malaya yet, an idea of moving trade and people by air. And eventually it was approved on 15 August 1927. An airline took shape. Eventually it progresses. As what you know, in 1947 it became Malayan Airways. So Adrian, the employees of Malaysia Aviation Group, is well aware that we are here receiving— we have received this baton from our forefathers 10 generations ago now, and it's our job to make sure that this baton is passed on, that Malaysia Airlines continues to uphold the spirit and the idea of our forefathers back then in 1922. So the first airline that flew was LATAM in 1919, I believe, June. The second airline was KLM in December 1919, I believe. And the idea was mooted in the Federation State of Malaya at that time in 1922. So it is important for the employees of Malaysia Aviation Group specifically and by and by large the public, the citizens of Malaysia. That Malaysia truly— Malaysia Airlines truly represents the hospitality of being a Malaysian. And we remain steadfast with that ambition. We remain steadfast with that responsibility. And we want to make sure it is our job to make this organization successful. After all, Malaysia Airlines is— we are ambassador on wings that flies all over the world. Thank you.

Adrian Schofield:Well, that's fantastic. And a lot of people talk about legacy carriers in a kind of a negative way, but, you know, that term legacy is quite a positive thing for an airline with such rich history. That is unfortunately all the time we have. I'd like you to join with me in thanking Captain Izham for some really interesting insights into Malaysia Airlines and where it's going. Thank you.

Datuk Captain Izham bin Ismail:Thanks, Adrian.

Adrian Schofield:Fantastic story.

Datuk Captain Izham bin Ismail:Thanks.

Adrian Schofield:Thank you very much.

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