The MAS/AirAsia share swap deal: “AirAsia’s Fernandes to gain 20% stake in national carrier”. The front page sources story in the Star today. “Fernandes declined to comment when asked about the deal.”, so says The Star. This was not what we know of Tony Fernandes, who loves publicity and is well known to jump on anything to say his bit to enhance his image. Read HERE.
This “share swap deal” is a joke of the century. It would appear that now AirAsia, which has been known to have the special “abilities” to owe airport taxes to the tune of more than RM125 million since it inception until 2010, has been made out to look like a white knight for MAS.
THE PERTINENT QUESTION NOW IS: IS AIRASIA BAILING OUT MAS OR MAS HAS BEEN USED AS A VEHICLE TO BAIL OUT AIRASIA? Your views please, YB Senator Datuk Idris Jala, the former CEO of MAS, on this issue.
Please read further. I leave it to you to judge.
During the settlement of the outstanding airport tax debts, the MAB, which is also part of the Khazanah Bhd’s setup, also gave a special discount of some 30 % to AirAsia when MAB should have demanded for full payment with interests because the passengers paid these airport taxes. The discount should be refunded to the passenger and not given to AirAsia. This is common sense but not to the Khazanah Bhd’s officials.
After I was elected to Parliament, I have brought up the issues of airport tax debts owed by AirAsia many times in Parliament. Strangely, prior to my admission to Parliament no opposition Members of Parliament have ever brought up the AirAsia’s airport tax debts and other issues relating to Airasia in Parliament. Was it a case of not wanting to upset the then PM, who was on a honeymoon mode? Read HERE, HERE, HERE, HERE, HERE, HERE, HERE, HERE, HERE, HERE, HERE, HERE for the proceedings in Parliament.
These outstanding airport taxes were lawfully due to MAB. Prompt payment of airport taxes will not only benefitted MAB but ultimately Khazanah Bhd. But Khazanah Bhd felt otherwise. It is unheard of in other countries where an airline, budget or otherwise, has been given the special “right” to owe airport taxes for more than 9 years, when all airlines are the collecting agent of such taxes for the authority. I am certain that if any other airlines were to owe airport taxes for a month, its landing right would have been withdrawn by a stroke of a pen. But in the case of AirAsia, it was rewarded with a discount! No wonder Tony Fernandes has been hailed as “the best CEO” and recently conferred with the title of Tan Sri!
AirAsia has been given the special rights to owe airport taxes but to compete with MAS in most, if not all of the profiting matured routes like London, several cities in India, Australia, Japan and etc. It must be noted that MAS has expanded enormous efforts not to mention costs to promote and nurture all the routes to make them profitable. MAS was like a boxer with its hands tied behind and put in the boxing ring to fight.
AirAsia had demanded and given 32 destinations to fly by Ministry of Transport and only to fly 16 profitable routes. Recently AirAsia has reduced its profitable destinations from 16 to 13. It has ceased to fly to the 3 destinations, presumably must be due to non-profitable. I believe that the dropping of the 3 destinations was made without seeking the approval from the Ministry of Transport. What is the Minister of Transport doing about this? Since AirAsia is only interested in flying to the 13 destinations, it is the duty of the Minister of Transport to immediately withdraw the remaining 19 destinations.
Whereas MAS had to fly all routes granted regardless of profitability, as MAS, is our national carrier and the country ambassador, keep our presence in other countries. Whereas AirAsia enjoys the special “rights and privileges” to owe airport taxes at one time and now pick and chose its destinations.
A few years ago, during the honeymoon period under Badawi, Tan Sri Tony Fernandes and his boys (under the outfit known as FAKS) fought so hard and were granted the right to take over the RAS (Rural Air Services) in Sabah and Sarawak from MAS. MAS gladly hand over the RAS with 7 airworthy aircraft and FAKS was handed a handsome subsidy of about RM65 million to carry out the RAS for several but only to cease the operation less than a year due to its inability to provide proper services and too many public complaints from Sarawakians and Sabahans including the East Malaysian politicians.
FAKS conveniently dumped RAS back to MAS and MAS, the whipping boy as usual was forced to resume the national service to provide RAS to our East Malaysians brothers and sisters. When taking over the fleet of aircrafts from FAKS, MAS discovered that all the aircrafts were un-airworthy and one of them was cannibalised for spare parts. MAS, at its own costs, spent RM35 million to put the aircraft in operation to carry out its national service to the nation and FAKS was not asked to be responsible for the sorry state of the aircrafts or pay to MAS the RM35 million expended to put the aircraft in the state of airworthiness. At the same time, FAKS was rewarded with the subsidy of RM65 million for providing the poor RAS for a few months and ceased operation prematurely! This is the “national services” provided the parties concerned.
I believe that this so-called share swap must be more than what has transpired in the Star quoting the main source from Malaysian Insider, the friendly news portal for AirAsia.
PLEASE TAKE NOTE: “AIRASIA HAS PURCHASED 200 AIRBUS A320 AIRCRAFT EARLIER THIS YEAR WITH THE OPTION TO BUY ANOTHER 100, WHILE MAS WAS SET TO MAKE A DECISION ON THE REPLACEMENT AIRCRAFT FOR ITS BOEING 747 AND 777 FLEET, WHICH IS MORE THAN 20 YEARS OLD.” so says The Star.
To date, AirAsia only flies to 13 destinations and MAS easily triple the destinations of AirAsia or more than that. So judge for yourself who needed the aircraft! Perhaps penalty time is up. So panic button has been pressed!
Everyone should now be asking:
Who is or was the agent for Airbus in Malaysia when AirAsia or Datuk Tony Fernandes, as he then was, when signed the agreement to purchase the 200 Airbus aircraft a few years ago?
Why AirAsia had to delay the deliveries of the Airbus when AirAsia was supposed to take delivery of it on a monthly basis?
Now according to the The Star report, Airasia has purchased 200 aircraft and MAS was to make a decision on replacement aircraft. I thought that MAS has already ordered several Boeing A380 and the delivery of them earlier next year. A380 aircraft will be in operation in April 2012.
YB Senator Datuk Idris Jala, the former CEO of MAS, should stand up now and be counted on the issue of this so-called share swab. Lets hope that Datuk Idris Jala will make his position as the head of NKRA meaningful by issuing a statement on this.
Now a share swap and gain a 20% stake in MAS. What a joke! Please wake up Khazanah Bhd. Please take care of our national carrier and other GLCs. Malaysians would not want to see Khazanah Bhd realizing the Malay proverb of “HARAPKAN PAGAR, PAGAR MAKAN PADI!”
I am wondering who is the actual owner of AirAsia!
Before I sign off this article, I would like to point out that Datuk Omar Ong, who was known to be closed to the famous former 4th floor, was recently appointed to the Board of AirAsia. Read HERE, Since then AirAisa has been flying higher and higher. Hopefully it was by chance! Last month, AirAsia got another 5 new destinations including Jeddah, one of the most profitable destinations. It is hoped that it was also by chance that this share swap suddenly emerged.
I shall definitely take this up and do what I can to get to the bottom of this “SHARE SWAP JOKE OF THE CENTURY” in October, when Parliament will be in session.
35 thoughts on “YB Senator Datuk Idris Jala: Is this AirAsia/MAS share swap an indirect bailout?”
13 destinations? maybe you should check again. could be a typo
agree with point made. might be a covert bail out. don’t let them get away. they’re squeezing dry the people’s money…
What share swab? it is an indirect bailout. YB must stop it. We must protect MAS from this big bully. Tony can do it when Chan Kong Choy, Badawi and the Tingkat Empat in power.
It is unheard of where the Government had to build the LCCT for a airline wasting almost RM200 millions. The government must stop to follow the whim and fancy of Tony Fernandes and gang.
YB CK Wee
Please ask these questions in parliament in October 2011. Although my suspicion is that by October all these would be history. Nevertheless we the people need to know,
1. Who are the real owners of Air Asia
2. What is the roles played by Khazanah and Idirs Jala in this ‘giving away the store’ deal
Economist Kampong and others
i will definitely press on with your questions. In fact, I have already spoke in Parliament who is the actual person behind AirAsia. I will do it again in October. Please rest assured that I shall not let this go.
Thank you all for the comments. They are noted with interest. Soon Everyone Will know!
With kindest regards
Good question, who is the real owner of AirAsia?
No bailout for for any public listed company. It is not the responsibility of the government to assist them. By allowing AirAsia to owe airport tax for so many years was evident of indirectly helping AIrAsia to compete with MAS.
Settlement of airport with a discount. Bloody nonsense. I hope that the government put a stop to the AirAsia nonsense. The government has no business to help AirAsia. It must be treated as any public listed company. Let them take delivery of the 200 airbus to fly the 13 destinations. Lets see whether Tony can talk after that. Make sure AirAsia pays its airport tax on time.
Dear YB CK Wee,
I’m deeply disturbed with this development and fully support your courage in finding the truth out of all this mess. Thanks to you.
THIS IS ALL VOO DOO ECONOMICS. YOU AND I WILL NEVER BE ABLE TO UNDERSTAND IT BECAUSE IT IS DRIVEN BY PERSONAL INTEREST.
In fact Nor Yacob and Idris Jala are the two best persons to explain the AirAsia nonsense. Of course, not to forget about the Sleepy Head, SIL and the 4th floor boys.
Go for it YB. We are with you. THe nonsense must stop. We thought that under Najib AiraAsia will not be given all the leeway as what it has been getting under the Sleepy Head. Instead it is getting another 5 profitable destinations including Jeddah recently.
I hope that October will not be too late. Please do your best. We need you to whack this “super genius” airasia CEO, who was caught lying in the Lotus court case in London a few months ago.
Thank you for highlighting this share swab. We are know what it is all about. A bailout.
YB, We want to know who is the real person behind AirAsia? Who is the agent for Airbus in Malaysia? How could AirAsia use the 200 airbus to fly the 13 destinations? When the Ministry of Transport will withdraw the remaining unutilised 19 destinations of AirAsia?
Please get answers for these questions, YB. Thank you.
I thought that it was game over for AirAsia where no more special treatment be accorded like when the SIL and the fourth floor boys were in power. Now under Najib it was no different. Must be the magic of Omar Ong, the God’s gift to Malaysia.
Interesting comments here. I also like to know who is actually behind AirAsia and Tony Fernandes. How could Tony Fernandes be so powerful to be able to owe million of Ringgit airport tax. Pelangi owed a few million Ringgit and its landing right was withdrawn.
If Oasis, the Hong Kong low cost carrier folded up last year, I would like to see the magic of Tony Fernandes doing without the government help. Hopefully the PM will think again if Omar Ong or Tony come along for special help.
Now everyone can con!
Thank you YB. What you have unveiled and written must be published publicly for the rakyat to know the story behind all this nonsense. May the voice of many, help to put a stop to this joke! The government must stop politicizing the economy.
Let me try and answer one of the question. There’s no such thing as Airbus/EADS agent in Malaysia, in fact you should checkout who are the Boeing agent in Malaysia – hence AA flying 100% Airbus. EU Antitrust Regulators are among the strictest in the world, and trxn as big as 200 aircrafts are vetted in utmost detailing especially when it’s involves listed entities.
Just a thought..
Biar betul ! …..
It is indeed interesting to note the movement of the AirAsia share prices prior to this announcement……
You raised legitimate points, YB. Mark my words, though. Some fee/debt owing will soon vanish somehow and some nagging aerobridge demands will soon come to bear.
It seems that Khazanah is rushing this share swap deal with great speed. Something fishy is amiss. Azman Mokthar must not be allowed to rush this nonsense through so quickly. We must know what is in store in this whole deal otherwise more public fund will be used for someone somewhere.
AirAsia has had enough of government continuous supports. Building of LCCT airport and the rebuilding of the same airport. Now another airport. Discount of airport tax debts and etc. Enough is enough.
I wish that they are more MPs taking up issues like this.
Ini adalah satu outright bailout untuk AirAsia.
Another project by Azman Moktar and his 4th floor connections. I don’t understand why s Najib allowing such nonsense to go on. The is the legacy of the Pak Lah’s administration. When is this nonsense going to stop. It is so glaring. YB has put the whole story in perspective. Need not go further.
Don’t understand why the PM allows such thing to happen. Is this part of so-called 1Malaysia and part of the round table discussion? It happens with almost every PM that Malaysia had. We have a government that really take care of a public listed company using public funds. I guess it’s time for the independent MP’s to form a coalition as another alternative to BN and PR.
YB, you are our only avenue to get straight answers from the government.
1 malaysia over and over again. malaysia is already a 1 malaysia country without all the promotions and bodeks upon other races.. i’m not being racist. i’m not a full malay anyways
Well done, YB. I have been watching you and you are the most consistent MP.
Why is the opposition keeping quiet… simple, they are allowing the country to go bankrupt first so that they can easily blame the current govt for their failure.
There is a joke going around town that we used to have an Idiot as the PM and now we have a PM with a lot of Idiots as advisers.
Time to save the country, People.
It is very suprising to see such a factless and purely speculative article from a YB. YB, first of all, it is neither a bailout for MAS nor is it for Airasia. It is in fact a new collaborative effort in focusing the potential of Malaysian aviation services to compete in its entirety against other regional airlines, ie SIA, Cathay etc etc as well as all its budget components such as silk, jet and tiger airways. They are all allowed routes into malaysia and are taking a big chunk of the market share from the malaysian players, simply because the local players are just too busy competing with each other. The is no hidden agenda behind it and it is a beneficial move for both the carriers. If airasia is being bailed out, it would not have been GIVEN the bigger chunk of shares (20.5%) of MAS shares compared to only the 10% of airasia shares given to MAS. The other way around should have been the case if this is a bailout for airasia. Next, Tony fernandes would not have been given the prerogative to restructure the MAS higher management if he is the one beng bailed out. Come on ppl, its simple sense, not rocket science.
Is this a bailout for MAS then? It might be but its not because although tony has become the single individual majority stakeholder, the whole of MAS still belongs, in equity and in all legality to Khazanah. A bailout would mean Tony taking over khazanah’s olace as the majority shareholder.
btw yb, are you sure 13 destinations is all Airasia flies to? I can list down here more than 13 and yet the list is not exhaustive. Singapore, bangkok, phuket, krabi, haadyai, phnom penh, saigon, ho chi minh, yangon, hong kong, macau, guilin, guangzhou, shenzen, haikou, jakarta, medan, solo, bali, balikpapan, brunei, melbourne, perth, incheon, london, paris, delhi, cristchurch, sydney, etc etc etc…more than 13 sir, anyway…anyway would be a waste to explain anyway. Im just wondering, why do u even hate airasia do much sir? Just wondering. Btw, i am neither affiliated with mas nor airasia…just a keen reader of your blogroll.
sir, i suggest u to attack straight since u’re politician, not businessman
highlight the main point, explain in easy language, thats what we rakyat want to see.
We support you, as can be seen in this post where we mention your blog – http://airasiaannus.blogspot.com/2011/08/government-allows-airasia-and-mas.html . We notice that you have borrowed some of our content. We are not precious about this, as we support you wholeheartedly; however, it would be greatly appreciated if you would mention [and link] to our own blog, ‘Fly AirAsia? Not Me’ – as a reciprocal courtesy. We are on the same team. Could you please make mention of our own efforts in this, or your next post.
Many thanks to you. Please keep up the great fight.
Causeway Co-Op, Fly AirAsia? Not Me
I am afraid your take on this is spot on.
This free flying Tony Fernandes with British Football Club and Formulae 1 and AirAsia (AA) has placed Malaysia in possible meltdown mode ahead. I am taking the liberty to quote the following that has been written elsewhere on AirAsia. I hope it is OK with its writer:
“….As of 31 March 2011, based on data from their 1st Quarter report, AA’s capital commitments stood at RM 19 billion. With the above announcement, an additional RM 54 billion will be added as Capital Commitments as implied in this article: http://biz.thestar.com.my/news/story.asp?file=/2011/6/24/business/8966621&sec=business
the proposed CC of roughly 75 billion will be spread over a 15 year period ending 2026. In other words, AA has to ratchet up its earnings to an average of 5 billion per annum to meet its future dues. From 2006 to 2010. AA’s revenue grew by 10 fold from 110 million to roughly 1.1billion, an average growth of RM 200 million per annum.
….Its cash trove rose 6 fold from approximately 300 million to 1.7 billion but its debts skyrocketed from 1.05 billion in 2006 to 7.7 billion in 2010, an increase of 700%. One gets the ghastly feeling that this is a debt burden that is spiraling out of control.
…To compound the issue, the world economy including Asia’s will be into another maelstrom and air travel will invariably be hit.
… and we probably will have a white elephant in NS soon give or take three years and another one of my dire predictions I made in when commenting on AA in 2009 materialises.
Of course AA can cancel orders but contract penalties will be onerous. In any case, TF is betting on the assumption that being a big borrower will shield him from foreclosure as banks will be leery of bearing heavy losses! but then a sizeable chunk of those loans are being held by Malaysian banks and in the worst case scenario, the government and the taxpayer will have to pick the tab to avert a financial meltdown cascading down the AA slope….
And on the outcome of the BN leaders letting bunch of airline industry novice British IVY League Khazanah boys toying in the airline industry with MAS, I am quoting the following what has been said:
”.. Their devilish prescription, WAU ravaged MAS…Deceitfully kept hidden is Kahzanah’s PMB – the bastard aircraft leasing company born by WAU. ..carries huge accumulated net losses of RM4.04 BILLION as at Dec 31st 2006.
MAS loss in the hand of an oilman? …when turnaround Sarawak Medicine man Jala came in it was RM 1.7 billion…now it’s RM 5.6 billion. Thus Jala lost 3.9 billion after any gains on sale of assets.
Rakyat needs the full story..how much did GOVT/Taxpayers lost out thanks to Azman Mokhtar & Idris Jala?”.
A humongous financial fiasco is brewing. This swap is a cunning develish scheme to chainto a potentially massive bail out of both Air Asia and MAS is on the card. Who really are suckers – the pathetic Malaysian tax payers, the marginalized minority equity owners, the ignorant peasants and working class chained to EPF.
Sir, you and we all have to press for this swap to be delayed until scrutinised and cleared a truly independent body under the Parliament. In fact a group should be commissioned to investige the cost to the tax payers EPF, Tabung Haji and Petronas since the day it was pirated (sorry privitised) by BN Govt to Tajuddin Ramli and now the potential I Malaysia multi billion dollar meltdown which make PKZ nothing but peanuts in comparison.
Air Asia is being bailed out. Package to rescue Tony. The country helping out an entrepreneur. Same old story, different actors. Thats my conclusion. why not save millions other country men in need of healthier daily food and proper shelter to educate and raise kids
100 % agree with the airport tax issue.bn will lose 1vote in next PRU due to this MAS air Asia share swap.Congrats khazanah or rather Congrats azman mokhtar.
Tony Fernandex is running a ponzi scheme with AirAsia. Continue buying airbus on credits and pocket the commission.
Sooner or later the peanuts and nasi lemak business model wont be able to pay for the airbuses and UMNO will be called to bail out this poor business model.
Anyone believing you can run an airline by giving out 1 million free seats and paying for gas, salaries and aeroplanes by selling peanuts must be believe in anything.
Also Air Asia is the most hated company in the environmentalist for ozone burning by promoting unnecessary air travel!
So Malaysian governemnt will the most hated ozone burners soon.
I ve never voted before in my life. This time I am going to vote for the alternative govt.
Those Penyamun Tarbus just never had enough. How many billions do they want. I pity them , I dont want them to to be burned in the hell fire far too long. The ill money gotten from the rakyat will be the flames that is going to burn them and roast them. Probably they dont know because they skip the religious classes when they were young. So I pity them. In Islam everything is accountable for every cent you make out of someone else and deprived of their right you just have to answer
Anyway If any of you see them, just ask them these questions :
1. How many hours do they have in one day to live.
2. How many life do they have.
3. How many mansions can they stay in one day
4. How much food could they consumes in a day
5. And lastly how much money could they shove in their graveyard when they die.
Their generations will be cursed for consuming ill gotten money.
aiyaa so scary lah………..
check mate. final issued before PRU13..
Fernandes Opens Up on AirAsia’s Future
A. Lin Neumann | July 22, 2011 – Jakarta Globe
AirAsia to Move Base to Jakarta 7:16pm Jul 22, 2011
AirAsia Launches Low-Cost Carrier in Japan 10:15pm Jul 21, 2011
AirAsia Launches New Carrier in Japan 2:20pm Jul 21, 2011
Tony Fernandes likes to be the life of the party — and he threw a big party in Tokyo on Thursday to celebrate a new alliance between his AirAsia and the ANA Group, Japan’s largest airline.
Flying in most of his company’s senior executives, a contingent of air hostesses and reporters from Indonesia, Malaysia and Thailand, Fernandes, AirAsia’s chief executive, seemed to be serving notice to the staid Japanese business culture that he was in town and ready to have some fun.
“At first, I think they got terrified by my culture, my style,” Fernandes said of his new partners in an interview with the Jakarta Globe shortly before he announced the deal.
“They thought it would be a disaster. My personality is probably 3,000 percent different than the Japanese.”
Fernandes said the deal was initiated by ANA three years ago. “The delay was because we told them the only way to run it was if we run it. Of course, for an airline such as theirs this was hard to swallow,” he said.
But swallow it they did. The new AirAsia Japan will fly the company’s signature red color and will follow the AirAsia model.
He said the two sides kept trying to make it work despite their differences and a tough regulatory environment in Japan that has just recently allowed budget carriers to operate. He said he convinced ANA they should do what they do best — run a full-service airline — and leave the no-frills operation to AirAsia.
“Economically, this is a monstrous potential market waiting for someone like us to open it up,” he said.
Fernandes also hinted that he might relinquish control of his airline, though he gave no specific details.
Asked if he would like to forge a joint venture deal one day in China, he said, “Who wouldn’t want to get into a market of a billion people? But that will be for the next leadership. I am getting to the end of where I can take this airline.”
So, is he stepping down? “Eventually,” he said, softening his tone a bit from the rah-rah cheerleading he is known for. “I don’t know when, but I think good leadership has to know when to go.”
For now, however, Fernandes, 48, divorced and with a reputation for liking the ladies and a stiff drink, is moving to Jakarta, where he has purchased an apartment to be near what will be the company’s new regional corporate headquarters at the Equity Building in South Jakarta.
He is not forsaking his native Malaysia, he says, noting that AirAsia is now a regional airline. “We are not identified with Malaysia,” he said.
With all the above comments and postings, are every Malaysian and politician aware TF and his goons loyalty?
MAS is the national carrier and is here to stay to service and continue to provide social responsibilities to link various Malaysia points. MAS plays pivotal role as a business entity and at the same time is tasked to undertake social responsibility in Malaysia and for the larger Malaysians populations. MUST Malaysians then continuously blamed MAS and its workforce when the company has been making insignificant profits or substantial loss in order to execute its roles? The company must absorb all the huge expenses like fuel hikes and flying to unprofitable routes as MAS plays its part as the tool and catalyst for the Malaysia economic and Malaysians business growth.
It is though not a permanent excuse for MAS and its management not to be able to turnaround and established MAS as a profitable airline through continuous costs containment and reduction and improve revenue generation especially from the passengers. Some of the costs were caused by unnecessary projects implementation to fulfill some top management like Moz-man who wanted to show off and the head of the company was unable to contain. The revenue management has been a screw up as the department and routes heads failed to look beyond their own regions and work together.
TF and his goons are purely on and for business interests and profits. They investments and interests are not firmly rooted in Malaysia unlike MAS. AA survivals, however, are not dependent on air traffic growth but heavily dependent on the political links which they formed their AA presence in these ASEAN countries. They broke many promises with ease and no regret to provide more services and to be the business catalyst in a number of Malaysian cities as reported in mass media – not a secret to the public. AA has bought more than 200 aircraft which are divided among their AA groups of airlines and up for heavy maintenance and would certainly “brake” their banks; the funds which partly funded from unpaid or not yet paid airport taxes or refunded to canceled passengers.
TF and goons resurrected a number of the once TR initiatives by splitting MAS ancillary businesses and MAS core expenditures like insurance expenses through various JV companies which they have significant stakes and not MAS. TF and his cronies do not “feel” for MAS and the country except for milking the monies out of MAS into their pockets through the JV. AA has already been BAILED OUT by having Khazanah Nasional to pump the Rakyat monies through the share swap. NOT a single cent was injected into MAS by this share swap deal.
The Government of Malaysia under the leadership of Najib must awake and make the right moves.