Minister of Transport confirms in Parliament AirAsia owes MAHB RM110 million!

The Minister of Transport has confirmed in Parliament today that AirAsia has owed Malaysia Airport Holdings Berhad (MAHB) RM110 million from 2002 until 31 March 2008!!!

During the Minister of Transport answering before Parliament: Wee Choo Keong [Wangsa Maju] informed Parliament that on 13 May 2008 it was untrue when the Minister of Transport said this: “With regards to the debt owed by AirAsia to Malaysia Airport Holdings Bhd (MAHB) the amount was RM5,443,746 and it was in the process of making payment.” Wee Choo Keong further added that the Minister of Transport was also misleading this August House when he (the Minister) said that AirAsia owed MAB the sum of about RM5.4 million and it was in the process of paying.

Wee Choo Keong [Wangsa Maju] challenged the Minister of Transport and stated that AirAsia actually owed MAB more than RM80 million, Petronas for fuel RM20 million and the Government for RM35 million for the repairs of 7 aeroplanes, which MAS took over from AirAsia when AirAsia gave up Rural Air Services (RAS). What actions will the Minister of Transport take pertaining to the said debts?

The Minister of Transport replied that the MP Wangsa Maju got the figures wrong. The Minister of Transport has confirmed in Parliament this evening that from 2002 until 31 March 2008 AirAsia owed about RM110 million to MAB for all services at all airports. The Minister went further to state that AirAsia is disputing its debt of RM110 million to MAB and this matter has been sent to the Ministry of Finance to resolve.

Wangsa Maju MP also informed Parliament that low cost carriers namely Skywest and Aloha in USA have collapsed. Low cost carrier in Hong Kong has also collapsed recently and there are four low cost carriers in India which are in trouble now.

Wangsa Maju MP also informed Parliament that AirAisia also involved in fuel hedging at about US$82 per barrel. Now oil prices per barrel has gone up more than US$120.

In the light of the above, Wangsa Maju MP asked the Minister of Finance to give an undertaking that the Government will not bail out or give any more subsidy to AirAsia if it is facing financial problems. But the Minister of Transport did not provide an answer to this undertaking.


1. How could MAB allow AirAsia to chalk up to RM110 million debt for MAB services from 2002 to 31 March 2008?

2. Since this is a private debt of RM110 million owed by AirAsia to MAB, why must this debt be referred to the Ministry of Finance?

3. Please go to the Parliamentary Page in my blog and go to Question No.: 60 on 13 May 2008 and you will see the whole question and answer on the subject matter. (Here’s the link.)

15 thoughts on “Minister of Transport confirms in Parliament AirAsia owes MAHB RM110 million!

  1. Anonymous

    My question is: Why MAB allowed AirAsia to owe them RM110 million from 2002 until 31-03-08 for all the airport services? MAB is a GLC and it is answeraqble to the public as it was set up by public fund. MAB is duty bounhd to explain to the public why MAB did not take any action to recover the debts owed by AirAsia?Something is very strange is happening here!!! It smells a rat!

  2. Anonymous

    MAB please explain: Why no action taken to recover the RM110 million owed by AirAsia?MAB you owe the nation an explanation over this matter.

  3. mohamad

    nice one! Tony sure cant have a good night sleep thinking about thisbtw, thier share price went below the IPO level yesterday

  4. Anonymous

    What is there to sue? angel_X and Anon 21-5-08 1:35 am.The Minister has confirmed in Parliament the RM110 million debt owed by AirAsia. I am sure that YB Wee was not worried about such threat. YB Wee had fought against MBf, an organisation bigger than AirAsia and MBf with all the political help and yet he survuived in the fight. At last, YB Wee got into Parliament and MBf collapsed a few years ago. We must look at the rakyat interests here. Why must the government allowed MAB to subsidised AirAsia by allowing it to owe so much monies from 2002 until 31-3-08. Surely MAB must take legal actions to recover all the monies owed by MAB. The MAB’s CEO should be questioned why no action taken against AirAsia.

  5. Anonymous

    Correct!Correct!Correct!Correct! MAB bosses should be called up for explanation why no action was taken until this date to recover the sum of RM110 million from AirAsia.MAB is a GLC therefore, it has to be accountable to the rakyat. WHy must AirAsia be given special preference whereby MAB allowed it to owe cost of services at the various airports from 2002 until 31-3-08. All the MAB bosses “Gaji Buta sahaja”!

  6. Anonymous

    I got teh following info from Hard T blog:Malaysia Airports Berhad (MAB)MAB was incorporated in 1991 when the Malaysian Parliament passed a bill to separate the Department of Civil Aviation (DCA) into two entities with different spheres of responsibilities. DCA remains the regulatory body for the airports and aviation industry in Malaysia whilst the newly created entity, Malaysia Airports Berhad is to focus on the operation, management and maintenance of airports. In November 1992, Malaysia Airports Berhad was duly licensed by the Minister of Transport Malaysia to carry out its function as the airport operator.AirAsia…was established in 1993 and started operations on 18 November 1996. It was originally founded by a government-owned conglomerate DRB-Hicom. On December 2, 2001, the heavily-indebted airline was purchased by former Time Warner executive Tony Fernandes’s company Tune Air Sdn Bhd for the token sum of one ringgit. Fernandes proceeded to engineer a remarkable turnaround, turning a profit in 2002 and launching new routes from its hub in Kuala Lumpur International Airport at breakneck speed, undercutting former monopoly operator Malaysia Airlines with promotional fares as low as RM1 (US $0.27). A new budget terminal, the first of its kind in Asia was opened in Kuala Lumpur International Airport on 23 March 2006. Built at a cost of RM108 million (US $29.2 million) and spanning some 35,000 square metres (116,000 square feet), the Low Cost Carrier Terminal (LCCT) is the new home for AirAsia Bhd.Based on ther above facts: Both MAB must tell the rakyat why no actions were taken to recover the RM110 million debt spanning over 6 years (2002 to 2008.)AirAsia must explain what are they disputing about?

  7. Anonymous

    MAB please account for no positive action against AirAsia over the RM110 million debt. When is MAB going to take the necessary action?

  8. apanama

    YB! Don’t ever give up on this issue coz there is a lot more to be dug out. Let’s ‘FLY’ AirAia to where they belong.p/s I think the Government, through MAS, should just take-over AirAsia for 1 Euro. – what do you think?

  9. Anonymous

    “AirAisia also involved in fuel hedging at about US$82 per barrel. Now oil prices per barrel has gone up more than US$120”.This had worked in favor of AirAsia, the fuel cost had been “freezed” at hedged cost. They’re at disadvantage, should the price fall below US$82 per barrel

  10. Anonymous

    Guys…..Since MAHB is a public listed company, please round up all the shareholders of MAHB and take this matter in the company’s AGM. If the quorum is enough, then call for an EGM.Minority Shareholder watch group — What are you going to do about this?Mismanagement of public companies is tantamount to CBT ( i think so. i am not a lawyer and needs lawyer like YB to check it out)

  11. Anonymous

    AirAsia is just like an empty vessel which makes the most noise. When they didn’t get the routes they wanted or more frequency to certain routes…they call for Press Conference as started to make remarks such as ‘AirAsia wants level playing field’ ‘dont send me to a boxing match with one of my hands tied at the back’ etc. And they kept questioning the government even have accused the government of subsidizing MAS’s routes to LA, New York etc. But when they are granted things of their requests, then its fine. AirAsia even used the media tu put pressure to the government so that they can have their own terminal, managed by themselves! This is completely ridiculous. Can you imagine what would it be like if we have more than 1 budget carrier and they started to put in their demands each to hv their won terminals? This issue of owing MAB is just to divert the public’s attention , ultimately money is not an issue for them. They want to have their own terminal then it could be managed they way they like it without being governed by anyone and more importantly they will become the ‘taikos’ coz they will charge other low cost carriers ie. tiger airways etc a heafty sum for parking charges, ground handling fees etc..

  12. Anonymous

    I think airasia said they haven’t paid because they are in dispute over the amount. Apparently its supposed to be a lot less than that. Let’s give them some time to make their case first then see what happens.

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