Monday, August 05, 2019

AirAsia episode: Indicative of directionless Malaysian aviation


MITI Deputy Minister gave a positive statement on the prospect of the Malaysian Aerospace industry. Recently, Selangor MB announced a positive new initiative.

However, these days rosy statements, launchings, and announcement of plans are nothing to be excited.

Unless it is a Deputy Minister from DAP that is pushing it from behind, nothing gets funding approval from Minister of Finance.

More so, that is Aerospace. The equally and larger Malaysian aviation industry looks clueless as to where it is heading.

Including the Prime Minister and Minister of Finance, even taking account the broken promises at GE14 campaign, DAP's Transport Minister, Anthony Loke is amang the few most impressive Ministers. Yet he does not seemed to be able to put things in the right perspective.

Amang is Minister of Tourism's way to pronounce among.

There were defensive supporters of MAS and Malaysia Airport then against the upstart and loud new model aviation brought by low cost carrier, Air Asia.

Maybe it is long overdue to bury the hatchet and move on. They were right and MAS failed miserably for being clueless.

Government still clueless on MAS


This blog had long buried the hatchet against Air Asia (as far back as 2015, in fact) and even the failed management cum major shareholders of MAS.

Notice this blog hardly comment on Air Asia and MAS.

Air Asia crossed that critical phase written in this blog many years ago. They had since flew to new heights and facing up to new and exciting challenges.

While MAS with the current shareholder, endless team of new management and even new government, not only do they could not get things to work out right, they just didn't get it.

It is pointless to keep blaming Air Asia and defend stupidity. In years to come, they will have to pay back the accumulated borrowings of the original MAS.

It was put on hold by law instituted for the last restructuring by now London-based Tan Sri Azman Mokhtar. He was the person involved through all phases of the failed MAS turnaround plan since Binafikir days.

Government is awaiting the study by Morgan Stanley, the current flavoured investment banker to a segment of the current government. Given to a banker, what else will be the outcome one could expect but only ringgit with no sen-ses?

There are still voices talking and giving indication that the current government and shareholder, same as the previous government, shareholder and management of MAS, could not decide between being a flag carrier or a commercial airline.

Let alone deciding between maintaining as a legacy airlines or low cost carrier.

Without being clear of the role of MAS in the larger scheme of the national aviation industry, what is the criteria and consideration to decide from among the 4 or 5 proposal in which names like Jentayu Danaraksa and Tan Sri Pahamin Rejab are just comedians!

If the government wants MAS to be a flag carrier with roles to promote Malaysia in the area of tourism, trade, transportation of goods and people, diplomacy, etc, then think and do something along a strategic line to pursue the larger benefit.


Take Qantas and Cathay Pacific, both are flag carriers.

The governments of Australia and Hong Kong had a role for them to play in which the benefits is seen in many aspect of the economy.

When faced with downturns, there was commitment and political will by government to revive it with a workable plan. Malaysia all talk but corks.

To carry the flag and promote the country, Government will have to spend and not rely on commercial return to do their work. There is no free ride. Cough out the money. Think of the way to make it work.

Integrating and re-channeling tourism budget and infrastructure with and to MAS is one way. MITI can think along the same line.


Instead, Malaysia had a Minister of Tourism, who as an LCE school leaver sent by parents to UK but flunked his O level and return to KK only with his guitar. The only expression he could utter in English to describe tourist destination is repeating "You know" and "bitches" for beaches!

Draconian authorities

Hawkish authorities

Air Asia introduced and popularised low cost airline in Malaysia and region. With the failure of MAS to revive itself, Air Asia made itself as the leading airline of the country and assume the national carrier role.

As a leading trading nation, the country badly need Air Asia. Without MAS and Air Asia, Malaysia cannot get the face to face connection with the rest of the world and what trade can get done?

Last month, there was a court decision in favour of MAHB against Air Asia for passenger services tax due to government that Air Asia is supposed to collect from passengers and remit.

However, they did not collect thus did not remit and the court decision would mean they will have to pay their own money themselves. Air Asia will face subsequent court actions should they refuse.

And they are still undergoing the court process with an appeal to the Court of Appeal. However, it is distasteful to see Board of Airlines Representative (BAR) making statement in support of MAHB to welcome the decision.

Why take side in a dispute between two parties and play politics in this strictly commercial transaction?

Air Asia rebutted with a statement here to reply to both MAS-led BAR of 39 inconsequential airlines, and MAHB to dispute the argument that the decision will lead to fairer competition.

All the years, Air Asia took the position that it is a different business model than the legacy airlines and should be treated differently. Their argument as not collect the charges is over RM23 per passenger, as follows:





While Air Asia wish to avoid passengers paying more, MAHB wish to upgrade its facilities to a standard they view as appropriate. Authorities claimed the service tax is lowest in Asia.

Be that as it may, Air Asia is reported by Edge Daily's to face more problems to come for charging services fee against rules set by MAVCOM.



It seemed to be motivated to proof Air Asia claim against PSC is inconsistent with their practices.

Sensing its about ego and emulating Air Asia's argumentative ways but through the courts.

It is heard that MAHB intend to do a civil suit against the current CEO of Air Asia for remarks made in public. Compared to Tony and later Aireen, Riad is hardly as combative and have sensibility in his views.

If they intend to do so, then MAHB is no more the patience, diplomatic and successful airport operator renown globally, but emulating the underhanded ways of other Guan Eng linked new corporate personalities.

Bank Islam's former CEO Dato Zukri and still Director Dato Zaiton Hasan, both now with Tabung Haji, made the Bank to do a civil lawsuit on their Managers, who was cleared by MACC and Police from any wrongdoing, to blame them for losses incurred.

No one should support bullies, even if it means bullying back Air Asia!

This is reflective of the cluelessness of the current government and with respect to the industry, the cluelessness of Ministry of Transport, MAVCOM and MAHB. Riad Asmat's latest critic of MAHB is its lost of focus to spend on integrating KLIA and KLIA2 instead of the improving its operation and the whole passenger experiance.

If that is the manner they treat Air Asia, then Air Asia could just pack up and reduce the status of KLIA from a home base to merely a destination. Air Asia is listed in few Asian bourses and they could just move the domicile of their operations elsewhere.

Quite sure there are countries willing to accept them and the taxes they could pay. Malaysia will be without an anchor airlines. Thanks to Mahathir led government, it will set the country back in aviation to the years before Malaysia Airways was born in 1947.

Departure tax? 


On top of that, Minister of Finance has made a decision to start charging for departure tax after the Haj season, from September 1st.

This is a mindless decision made when one consider next year will be Visit Malaysia Year 2020 to promote tourism, you know?

Having departure tax will be counterproductive. It is making the hated Tony Fernandez's argument sensible. Departing from Malaysia will cost additional RM8 to RM120 per passenger.

Ever since the new CEO of MAHB was brought in and he turned out to be a Melayu Macai of the Minister of Finance, his behaviour and actions seemed to emulate the stubborn, ego and combative Guan Eng.

Guan Eng messed the government's fiscal policies with his own decision on GST and instead of one efficient tax, introduced more new taxes and cause rising cost of living.

Government used Japan's sayonara tax as justification. However, Turkey's introduction and increase in departure tax was indicative of government desperately in need of money.

Politically, departure tax could be Guan Eng's ploy to divert money away from Sarawak.

1 comment:

Prince Righty 1 said...

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