Media taking sides

The MAS issue is gaining prominence as public issue. Rocky Bru's "Malaysian Airlines has arrived!" posting yesterday puts it well.

It is also pitting newspaper companies against each other.

On one side, Utusan Malaysia seems to be lending a hand to the voices from the union and public (read here), particularly those from East Malaysia (read here) against the MAS-Air Asia-collaboration.

The anti-collaboration side appear to be in sync with PM's pro people slogan and recently using the anti-trust issue to gain further credibility. Read here

While on the other side, The Star, The Edge and Malaysian Insiders are giving MAS management, particularly to Chairman Tan Sri Mohd Nor Yusof the space and support.

That can only be understood by knowing the whose who at The Star, The Edge and The Malaysian Insiders. Read Uppercaise here.

From left: Ho, Lee, Fernandes and Star Publications executive director and group chief editor Datuk Seri Wong Chun Wai

The Chief Executive of The Star, Ho Kay Tat moved from The Edge to The Star two years ago. He is a friend of Dato Kalimullah and naturally to Tony F.

He could be the reason the news on Kalimullah-Rocky settlement was distorted to hide the fact that the settlement arise from Kalimullah's apology to Tun Dr Mahathir. In other words, it is Kalimullah's admittance of guilt since Tun is not a party to the dispute.

With Air Asia in collaboration with The Star in content partnership, the more reason to back them. Read here.

The Star has been backing MAS management and they are using analyst to back their claim (read a sample here).

Careful with analyst. In the words of Gordon Gekko, the leading character in the movie Wall Street, "They're analysts, they don't know preferred stock from livestock." Trust us, we were in the market as both professionally and as a hobby.

Read Wong Sai Wan's here.

BK Siddhu is for the collaboration since back in December here. Only Gunasegaram has an opposing view here. But that is Guna, who does not fear controversy.

Nevertheless, his view is for a totally unregulated free for all open sky policy. That would not help ailing MAS neither. It comes with more wasted resources.

With former regional correspondent for the Straits Times, Leslie Lopez as the Deputy Editor-in Chief to new Editor-in-Chief, Kevin Khoo, one can predictably expect which way they are going on the issue. Read a sample here.

Friends in Singapore are lending their hands too. Read Flightglobal.com here

Just as one can predict which one The Malaysian Insiders is going. Samples here and here.

In typical TMI spinning ability, they trying to quiet the union by saying the collaboration as Najib's idea. Or is it really Nazir's. Read here.

The common factor between The Malaysian Insiders and The Edge is Kalimullah.

To counter the negative sentiments against the collaboration in East Malaysia, Borneo Post is doing the pitching. Read sample here.

Wall Street Journal is still neutral judging from this news here.


By the look of it, the only argument for is only to "give the collaboration a chance."

However it is losing grounds to public out roar, be it due to the cannibalisation of MAS, negative news on Air Asia practices, terminating services by MAS is encoraging monoply, unethical Air Asia and inefficiencies, and cheating MAS human resource practices.

There is also the alternative media that is generating more news and hard hitting information for the unwinding. Even small blogs like this here helping the cause.

MAS and Air Asia choose to ignore the alternative media and it will come at their own peril.

Free Malaysia Today here highlighted Wee Choo Keong's expose, the "buying cheap Air Asia-X ticket and fly MAS" scandal:

Has MAS lost millions carrying Air Asia X passengers?

Teoh El Sen, March 17, 2012

Wangsa Maju MP Wee Choo Kiong has alleged that MAS carried Air Asia X passengers to London Paris Mumbai for free except for fuel charges.

KUALA LUMPUR: National flag carrier Malaysia Airlines(MAS) may have allegedly suffered huge financial losses as a result of carrying AirAsia X (AAX) passengers for ‘almost’ free, claimed independent Wangsa Maju MP Wee Choo Keong.

Wee lodged a police report against the top management of MAS alleging that there may have been “criminal elements” involved.

Wee named Ahmad Jauhari Yahya, (MAS Group CEO), Mohammed Rashdan Mohd Yusof (MAS Group Deputy CEO), Rozman Omar (MAS Chief Finance Officer), and Shane Nollan of Plane Consult (Acting Commercial Director) in his report filed at Kampung Baru Subang police station.

In his police report yesterday, Wee referred to two passengers from AAX who both allegedly traveled on March 3, 2012 on a MAS flight (MH 194) to Mumbai.

“The MAS tickets numbers for both ex-AAX passengers are as follows: Ms Noorezatti Matyacob, 2322416844159; Mr Jain Abhinav,2322416844150,” wrote Wee.

Wee said both tickets showed no fare and airport taxes being charged by MAS except for fuel surcharge of RM390 for each of the two passengers.

This was despite the MAS internet fare for Kuala Lumpur – Mumbai being at RM618 per passenger at the time.

“There was an obvious no corporate governance and possible criminal elements involved in the way in which these two tickets were issued which has caused financial loss to MAS,” said Wee in the report.

He added that under normal business practice of MAS, a corporate guarantee had to be given before MAS uplifts any other airlines passengers but this was not in the case of AAX passengers.

Wee said that AAX had terminated its London, Paris and Mumbai routes in February 2012. Some 30,000 passenger were affected by these cancelled flights.

On March 13, AAX also terminated its Christchurch routes from May 30.

“AAX did a block booking for its passengers with MAS for its European and India routes,” said Wee, and listed down several names of other passengers that he obtained.

‘It’s daylight robbery’

Speaking to FMT, Wee said it seems like AirAsia passengers can now fly MAS.

“Now you can book a cheap AirAsia flight and fly under MAS when AirAsia has problems? This is unheard of.

“If this is part of the collaborative deal, then MAS is doomed from the start. It is on the losing side all the time. Who is helping who?

“Is MAS helping AirAsia or is AirAsia is helping MAS? By the looks of it, I think its more of a case MAS paying Air Asia. Clearly this is unfair,” he said.

Wee said that it was illogical that MAS, knowing that AAX was desperate to appease its customers, had allowed AAX passengers such low fairs.

“Under normal circumstances, MAS should have insisted that the airline they were helping pay up the full fares, and provide a bank guarantee. Meaning MAS would get guaranteed payment. But no, that’s not the case here,” he said.

Wee said Abhinav was just one of the 30,000 of AAX passengers who were uplifted by MAS recently.

“This is only Mumbai tickets. What about London where you are talking about tickets up to RM2,000-RM3000 per passenger. I can see maybe involving RM300million? This is not even considering the Christchurch flights which is out of the 30,000 people we’re talking about.”

“Now I hear that they are trying to backdate their documents. I call for the police to immediately investigate this based on the evidence.

“This is more or less cheating. Something I would describe as daylight robbery,” he said.

MyCC must investigate

In his blog posting yesterday, Wee posted what appeared to be an online MAS ticket obtained from internal sources that showed details of Abhinav’s flight, who is charged RM390 only with zero fare cost.

“MAS uplifted this AirAsia X Sdn Bhd passenger with the only payment of RM390 for fuel surcharge.

“From this passenger alone, MAS has incurred losses of at least RM618 without taking into account the airport tax, which MAS had to pay out and other cost.

“Would this be a case of AirAsia X Sdn Bhd having the luxury of keeping the fare paid by
this passenger and the other 30,000 passengers that MAS have to uplift due to the terminations of its routes to London, Paris and Mumbai?

“Not a bad business deal after all! Now everyone can take MAS for a ride’” Wee wrote.

“No wonder AirAsia X Sdn Bhd officer announced with confidence that those affected 30,000 passengers can still travel to their destinations without having to pay extra charges in fare.”

“A formal complaint must be lodged with Malaysia Competition Commission(MyCC) as this blatant act of not charging fare by MAS for uplifting the 30,000 passengers of AAX is against the spirit of competition and therefore has contravened the Competition Act, 2010,” said Wee.

Aside from asking MACC and other government agencies to act, Wee also pleaded with Prime Minister Najib Tun Razak to step in immediately in the light of this evidence and remove all top guns in the company for failing in their duties to look after the interests of MAS and, “most of all, their inertia have contributed to the existing leakages, which is the main problem in MAS”.

Wee said he cannot believe such a “losing business arrangement” was part of the comprehensive collaborative framework(CCF) between MAS and AirAsia after the inking of the MAS-AirAsia share swap.

Review of MAS-AA alliance

Earlier this month, it was reported that Najib was said to be reviewing the MAS-AirAsia alliance igniting speculations that the controversial share-swap between the carriers could be scrapped entirely.

MAS’s poor financial performance had resulted in the MAS-AirAsia share swap last August.

It saw state investment arm Khazanah Nasional taking a 10 per cent stake in Asia’s top budget carrier in exchange for a 20.5 per cent stake in the flag carrier.

The much debated share swap deal is also reportedly being investigated by Bursa Malaysia, the Securities Commission as well as the newly set up (MyCC) for possible insider trading or monopolistic abuses.

Apart from exposing the fraud by Air Asia, Wee should be credited for playing up the anti trust argument.

Perhaps we could seek credit for exposing Air Asia's weakness. Remember we said their growth model will face problem and they are a future Pan El in the process.

Interestingly, more for protecting SIA and Tiger Airline interest (not to mention the Indonesian too for the Jakarta Globe here), Straits Times Singapore is helping our cause.

AirAsia Scrapping Long-Haul Flights

AirAsia X chief executive Azran Osman-Rani said, "We're not shrinking the business. We're growing and redeploying, moving our planes to different routes." (Bloomberg Photo)

Hazlin Hassan - Straits Times, March 19, 2012

Kuala Lumpur. London, Paris, Mumbai, and New Delhi were the first to go.

Now Asia's biggest budget airline, AirAsia, is scrapping its flights to Christchurch too, in a drastic retreat that shows how deeply high fuel costs and the global economic crisis have crippled the once-thriving sector.

Other airlines in the region are in trouble, too, with India's Air India, Jet Airways, and Kingfisher Airlines all seeking government help. Kingfisher has not paid salaries in months, while Jet Airways had its accounts frozen after failing to pay its taxes.

"It's not just us," said Azran Osman-Rani, chief executive of AirAsia X, the long-haul arm of Malaysia-based AirAsia. "Even the full-service model is not working right now. It's not about the low-cost model."

AirAsia's profit fell 47 per cent to RM 564 million (US$ 185 million) last year, after average fuel prices rose 36 per cent over the year.

Its unit AirAsia X was launched in 2007 with Australia's Gold Coast as its first destination. Analysts said AirAsia may have overestimated the viability of the low-cost model when it comes to long-haul flights.

"Long-haul is a tougher business model," said aviation analyst Ahmad Maghfur Usman from OSK Research. "You don't get as much travel frequency (for planes) as you would with short-haul."

AirAsia X said it is in the midst of adding flights to more profitable routes elsewhere, mostly involving flights not longer than eight hours.

Last week, it announced that it was increasing the number of flights to Taipei and Perth in June, routes which have seen average passenger loads of better than 85 per cent.

Azran said that the long-haul routes work well in markets such as Australia and Greater China, where AirAsia X has multiple destinations.

It will be setting up AirAsia Japan in August this year, with domestic flights within Japan.

"It's not just slashing routes; it's re-definement," Azran told The Straits Times. "We're not shrinking the business. We're growing and redeploying, moving our planes to different routes."

The airline problems in Europe had to do not just with high fuel prices, but were compounded by a drop in demand following the euro zone crisis, as consumers cut luxuries and long-haul leisure travel, he said.

Azran also puts the blame on the higher taxes for passengers in Britain and the rest of Europe.

The British government has been slammed by the Association of Asia Pacific Airlines, which includes Singapore Airlines, for taxing air travel in the form of the Air Passenger Duty, which will be raised by 10 per cent from April 1.

European aviation bosses have also criticized a European Union carbon levy on airlines, which took effect in January, for threatening the industry.

Some observers also wonder if the cutting of European routes may have something to do with avoiding competition with national carrier Malaysia Airlines, which did a share swop with AirAsia last year.

Whatever the case, AirAsia X may simply be going where the passengers are.

UOB Kay Hian Research regional aviation analyst K. Ajith said, "The focus has come back to Asia, primarily because that's where the growth is."

Outbound China travel is also expected to increase as more Chinese holiday abroad, and this will benefit the airline, he added.

In the next two years, as it doubles its fleet, AirAsia X plans to add flights to Japan and open routes to Sydney, Adelaide, Fukuoka, and Busan. In three years, it is looking to fly to South Africa and Turkey.

"Airlines are usually slow and loath to make changes," said Azran. "The reality in today's climate is that we need to make changes."

Such negative news of Air Asia will be unheard off in Malaysia but it is okay to be negative of MAS.

More such news should be brought forward to make the public aware that Air Asia is trying to save it's own skin at the expense of MAS and this should add pressure to stop the collaboration.

For the union, the General Election is a strategic carrot for the PM to decide in their favour but voting opposition may not be wise. Pakatan Rakyat will not be sympathetic ear for MAS and will clearly be bias for Air Asia.

Maybe it is because MAS is being seen as a Malay company and Air Asia as a more representative of Malaysian racial composition. But it is more because Kalimullah is a DAP supporter cum intelligence gatherer for Singapore's PAP.

Nevertheless, PM need to be given more information and furnish the list of abuses by Air Asia, like the one Wee Chee Keong had done, to substantiate and justify the common "not Tony F" dissatisfaction.

For that, all MAS employees must speak up. Or at least, comment in this blog so we can compile and bring it forward to somebody.

That is the only way to get that heartless, dishonest and conniving short and medium haul CEO fired.

Looks like one of our mole in MAS is either lazy or in fear to list down and email us the list.

Maybe at the border of paranoia. MAS monitor in and outgoing emails using company's system but not as Big Brother in George Orwell's 1984; able to monitor the movement of their staff and communication through e-mail, SMS and handphone.

Nevertheless, do wake up from your fear, my friend. The choice is between your job, career and children to feed or "A Beautiful Mind" fear.