Highlight Berjaya Air to undergo makeover

by **Cals** Wed 27 Nov 2013, 10:15

Highlight Berjaya Air to undergo makeover

Business & Markets 2013

Written by Madiha Fuad & Isabelle Francis of theedgemalaysia.com

Wednesday, 27 November 2013 08:51

KUALA LUMPUR: A network review and the appointment of Datuk Eddy Leong as CEO of Berjaya Air Sdn Bhd, a wholly-owned subsidiary of Berjaya Land Bhd suggest that a makeover is underway for the airline.

Sources said Berjaya Air is going through a business review, which includes the suspension of flights to Langkawi, Pangkor, Penang and Hua Hin, as well as the acquisition of a Bombardier jet.

“Berjaya Air has already started talks with Bombardier,” said a source.

The changes come hot on the heels of talk that AirAsia Bhd’s Tan Sri Tony Fernandes and his partner Datuk Kamarudin Meranun will emerge as shareholders through their vehicle, Caterham Jet.

It has been speculated that Caterham Jet, which is controlled by Fernandes and Kamarudin, is looking at acquiring 49% of Berjaya Air while 51% remains with Berjaya Land.

Fernandes and Kamarudin did not reply to queries. However, sources close to Berjaya Group said it is likely for the airline to continue to be wholly owned by Berjaya Land.

The fact that Leong stepped down as CEO of Khazanah Nasional Bhd’s Destination Hotel and Resorts Sdn Bhd to join Berjaya Air as CEO, signals that operational changes are underway for the airline.

Leong joined Berjaya Group in September and was seconded to Berjaya Air as CEO at the end of October to oversee the business review. He is no stranger to the airline business given his experience as former managing director of Firefly, the turboprop unit of Malaysian Airline System Bhd.

Berjaya Air officials did not comment on the shareholding changes. According to sources, the company is reviewing its network starting from next week due to operational reasons.

Market watchers are of the view that the review is to pave the way for the offering of premium jet services by the airline but this was not confirmed by the officials.

Caterham Jet had previously failed to get a Malaysian air operator certificate (AOC) that would allow it to run a commercial jet operation from Subang Skypark.

In 2011, Fernandes said that he was launching a new premium airline called Caterham Jet to compete with the Emirates, Cathay Pacific, Thai Airways and Singapore Airlines and aimed at high-flying executives in Asia.

If Caterham Jet gets a substantial stake in Berjaya Air, which operates both scheduled and chartered flights, it will allow the super-premium carrier to start operations without applying for an AOC.

Caterham Jet’s premium jet services involve comprehensive business aviation services that will appeal to professionals who want a quicker exit via Subang Skypark instead of the Kuala Lumpur International Airport.

Berjaya Air, Firefly and Malindo Air operate from Subang Skypark. Currently, Berjaya Air operates two ATR72-500 and three Dash 7 aircraft. Sources said it is likely for the airline to expand its fleet to incorporate Bombardier CRJ jets with higher seat configurations in its bid to target the business and first-class travel segments.

Berjaya Land’s share price, which hovered around 92 sen in October, closed lower yesterday at 82 sen.

This article first appeared in The Edge Financial Daily, on November 27, 2013.