AirAsia open to talks with Malindo Airways

by JF Thu 27 Sep 2012, 10:22

In recent months, Tan Sri Tony Fernandes has sought partnerships with potential rivals, as the margins in operating budget carriers are squeezed.

AIRASIA Bhd, Asia's largest low-cost carrier, could potentially co-operate with Malindo Airways, a rival carrier which is seeking to start its own low-cost operations here by as early as next year.

Malindo Airways, which is backed by the National Aerospace and Defence Industries Sdn Bhd (Nadi) and PT Lion Group, had jolted AirAsia after it announced plans to start operations by May 2013 using the new low-cost carrier airport, KLIA2 in Sepang, as its base.

Tan Sri Tony Fernandes' AirAsia has had a virtually uninterrupted domination over Malaysia's air space since it started operations in 2011.

Fernandes had bought AirAsia for a paltry RM1 from DRB-HICOM Bhd, and since then it has turned the company into one with a market capitalisation of RM7.9 billion.

In recent months, Fernandes had sought partnerships with potential rivals, as the margins in operating budget carriers are squeezed.

The most notable partnership was with Malaysia Airlines, which saw Fernandes taking a stake in the national carrier. The deal eventually had to be called off.

Fernandes now seems to have zeroed in on Malindo Airways as a potential rival which could give Asia's top budget carrier a run for its money.

That seems possible, as Malindo Airways plans to offer flights within Malaysia and Indonesia, as well as to Thailand, China, India, Japan and Australia.

Fernandes, who is also the group chief executive of AirAsia, said he will be meeting up with Rusdi Kirana, the president director of PT Lion Group, soon.

PT Lion owns a 49 per cent stake in Malindo Airways while its Malaysian partner Nadi has a 51 per cent stake.

PT Lion Mentari Airlines, which operates as Lion Air, is Indonesia's largest privately run airline, and is owned by Rusdi and his family.

"We will meet over dinner soon. I am not here to make enemies.

I respect him (Rusdi). He has done a great job in Indonesia."

" I think there are many things that we can collaborate on. If we can work together to lower airport charges, then why not? I welcome it," he told reporters after launching AirAsia's Badminton Academy here yesterday.

Nevertheless, Fernandes, ranked by Forbes magazine as the country's 15th richest man with a net worth of US$615 million (RM1.9 billion), said that AirAsia and Malindo Airways will still compete.

Meanwhile, Fernandes said he hoped that the upcoming budget will do more to encourage the tourism sector here.

"I think that anything in the budget that helps make it easier to do business - especially for young entrepreneurs, not just for aviation but for all industries - is good," he said.

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