(Repeats story that first published Sunday; no changes to text)
* New CEO Mueller is airline restructuring veteran
* Carrier will have new name, smaller fleet and third less staff
* But brand and cost challenges facing Malaysia Airlines are huge
* Analysts also worried about long history of govt interference
By Siva Govindasamy and Al-Zaquan Amer Hamzah
SINGAPORE/KUALA LUMPUR, May 31 (Reuters) - New CEO Christoph Mueller's plans for troubled Malaysia Airlines - including a new brand, a smaller fleet and one third less staff - are widely seen as a promising blueprint for a fresh start.
The 52-year old German has successfully restructured Ireland's state-backed Aer Lingus and spearheaded a revamp at Lufthansa. He has also already impressed in his new job with his micromanaging ways, according to one long-time Malaysia Airlines executive.
Even so, many analysts worry that the state-owned carrier's long history of mismanagement and government interference, and its severely damaged brand after last year's two plane disasters will be too much to overcome.
"You can't parachute in someone irrespective of how sterling his previous record shows and expect him to do a job with an airline that's been abused for two decades," said Shukor Yusof, an analyst at Malaysian aviation consultancy Endau Analytics.
In addition to an unprecedented need to build a completely new brand after the disappearance of flight MH370 and the shooting down of MH17, Mueller must slash costs at a time when the airline faces intense competition from other full-service carriers and budget airlines.
Forced to fly to unprofitable destinations to promote Malaysia's foreign policy agenda, keep on more staff than needed due to powerful unions and to hand out contracts to politically connected firms, the airline has been saddled with a cost base 20 percent bigger than its peers, analysts say.
LITTLE MARGIN FOR ERROR
Mueller, who speaks directly and concisely, is well aware of challenges.
"It is the government who is funding. What they want in exchange is a new national icon, a new national carrier," he told Reuters in an interview last week.
"I'm hired to run the new company entirely on commercial terms and there's very little margin for error," he said.
Mueller, who joined the airline's board early this year and became CEO last month, added that he was aiming for a much smaller network and fleet and a sharper focus on cost-cutting - some of the strategies he pursued at Aer Lingus which was on the verge of collapse when he took over in 2009.
Efforts to rationalise the fleet have, however, hit some early speed bumps with the carrier so far unsuccessful in finding buyers for two A380 aircraft that it has put up for sale.