Don’t blame Air Asia for MAS’ failings

Joe Fernandez

 | September 7, 2014

Comparing the two is like comparing apples with oranges.

COMMENT

In his article “Saving MAS”, posted at sakmongkol.blogspot.com, Raub MP Ariff Sabri Abdul Aziz seems to be making Air Asia the scapegoat for the failings of MAS.

It must be remembered that no bank in the country, except Sabah Bank, wanted to finance Air Asia. Sabah Bank could only offer RM1 million, which was not taken up. Yet Tony Fernandes remembers this kind gesture until today and never fails to mention it every time he visits Sabah. It was Aerobus of Europe which came to the rescue through European banks.

There’s no basis for comparison between Air Asia and MAS.

MAS is a full service airline with its flights and market share under the flight freedoms policy. Air Asia is a low-cost, low-fare budget airline.

Air Asia’s market does not come from eating into MAS’s market share. It comes from growing the market. Air Asia was born when Fernandes realised that “MAS was charging people one month of their salary to fly from one part of the country to another.”

Air Asia fares are calculated by computer. The first ten seats are the cheapest. Promotional fares are even cheaper. The fares go up every ten seats. The last ten seats on a flight are only slightly cheaper than offered by MAS.

If you want to get the cheapest fares, buy as early as possible, pay up and fly as late as possible i.e. book two years in advance. That’s money in advance for Air Asia. That’s almost like running charter flights but collecting the fares early. Air Asia hedges its fuel purchases and allows for forex changes.

MAS was killed by its high-cost of operations owing to its government-dictated flag carrier/flag waver/flag shower policy, not hedging the fuel prices and forex changes, overpriced contracts feeding Umno cronies, corruption, nepotism and politics. Who has the contract to buy fuel for MAS from the spot market in Singapore?

MAS suffers from bad management and a lack of leadership. Just look at the top line-up.

MAS should take a leaf from Petronas, which told even Mahathir Mohamad to get lost. Petronas made it clear that it was not an Umno company and Umno members can’t expect contracts from it just because they are Umno members. Mahathir even got Ibrahim Ali to scream at Petronas for not behaving like a Malay company. The Sabahans and Sarawakians told him off and said Petronas belonged to them.

Great article to read. Learned quite a lot from it.

Well if you want to feed cronies and supporters - DO IT with your own MONEY and not from tax-payers. Only in Malaysia this can Happen and Happen continually till the end of TIME - MALAYSIA BOLEH!!! Mahathir Boleh ALSO!