Is this AirAsia/MAS share swap an indirect bailout?

August 7, 2011 by YB weechookeong

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.
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?
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  I am certain that if any other airlines were to owe airport taxes for a month, its landing right would have been withdrawn by a stroke of a pen.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., 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.