Edge Weekly AirAsia wants more

by **Cals** Mon 07 Jul 2014, 01:53

Edge Weekly AirAsia wants more

Business & Markets 2014

Written by Surin Murugiah of theedgemalaysia.com

Saturday, 05 July 2014 07:46..

KUALA LUMPUR (July 5): The Edge Weekly, in its latest edition reported that low-cost carrier AirAsia Bhd’s co-founder and group CEO Tan Sri Tony Fernandes as saying that the low-cost carrier wants to put all the controversies and negativity leading up to the launch of klia2 behind him and work closely with the country’s airport operator, Malaysia Airports Holdings Bhd (MAHB).

The Edge Weekly in its cover story said Fernandes was willing to hold out the olive branch and wants to make Malaysia the No 1 hub in the region.

“There is tremendous opportunity for both companies, if MAHB and AirAsia were to get together,” the magazine quoted him as saying in an exclusive interview in Tokyo.

The Edge also cited him as saying that AirAsia wants to work with decision makers at MAHB to build us low-cost carrier terminals [LCCTs] and keep charges low.

On June 23, MAHB saw a changing of the guard with Datuk Badlisham Ghazali of the Multimedia Development Corporation replacing managing director Tan Sri Bashir Ahmad Abdul Majid, who is now an adviser to the company.

“We are flexible. Just give us an airport with low charges and we will bring people in. Listen to us, we are not the enemy,” it cited Fernandes as saying. `

Back in 2009, Fernandes and Sime Darby Bhd’s proposal to build a RM1.6 billion LCCT in Labu, Negeri Sembilan, failed to materialise owing to political backlash.

Recently, there had been speculation that Fernandes is mulling over a takeover of klia2 — which Fernandes denied.

At present, Tan Sri Syed Mokhtar Albukhary through MMC Corp Bhd, which he controls, has interests in Senai Airport, the only one in the country that is not in MAHB’s stable of 39 airports. Rumours have been rife that the tycoon is looking to expand his portfolio in the aviation industry.

Syed Mokhtar had bought the airport from MAHB in 2003 for RM80 million. In 2008, it was sold to MMC Corp, together with some parcels of land, for RM1.7 billion.

The Edge reported Mohshin Aziz, aviation analyst at Maybank Investment Bank Research, as saying that Fernandes’ vision of having more LCCTs may be taking a page out of Syed Mokhtar’s book of owning and operating an airport.

“MAHB does not have the resources to build more terminals due to the heavy expenditure incurred for klia2. AirAsia or Tony could work with the state governments on building the LCCTs,” said Mohshin.

The Edge weekly also reported Fernandes had no plans to revisit the failed share swap with Malaysian Airline System Bhd (MAS), but was confident that the loss-making national airline would be able to get out of its financial difficulties if “its crutches are removed”.

The proposed RM1.1 billion tie-up in 2011 encountered strong resistance from the 20,000-strong MAS Employees Union, which voiced concerns that the deal resembled a takeover by the AirAsia founder.

Under the proposed deal, Khazanah would get a stake in AirAsia while Tune Air, which owns 26% of AirAsia, would get a stake in MAS.

The agreement also included the appointment of Fernandes to the MAS board and inevitably required the national carrier to downsize and abandon its attempt to compete with AirAsia at the low end of the market.

Despite the failed experiment, Fernandes said MAS had tremendous potential to succeed and salvage its business.

“Someone has to be brave and really look into it objectively. Not to look at it from the union’s perspective, but ultimately — not that the union is helping the staff — morale is down; many have not got bonuses for a long time.

“We built the airline [AirAsia] with people from MAS. I know because I was there. Half of AirAsia are MAS people. It [MAS] can be fixed in six months, I have no doubt about it,” the Edge quoted him as saying.

For more details on Tony Fernandes’ plans, read the Edge Weekly (July 7 – July 13 issue)