Yeah, allowing MAS’s turbo-prop planes to operate from Subang air terminal based on turbo-prop planes being environmentally friendly to residents around may be mere excuse/pretext for ‘quiet favoritism’ shown to MAS but so what? What’s the larger picture – is the government really favoring MAS over Air Asia?

Granted, Air Asia, from the nature of its beginnings as a private entity has many hardworking staff who are prepared to wash the airline cabins – compared to MAS, run like a typical GLC at least prior to Datuk Idris Jala’s appointment as CEO to turn it around – so to speak, but no one can seriously suggest that, by now, it is not receiving government’s favour and patronage of BN’s politicians! Don’t we all see Tony Fernandes being featured in newspapers and friendly with all the bigwigs and even SIL? Damn good PR! (There is this joke making its rounds within the industry that dubs Dato’ Seri Chan Kong Choy “Minister in charge of AirAsia”!)

Why don’t we talk of MAS’s loss of monopoly over the lucrative Kuala Lumpur-Singapore route to budget airlines like Air Asia? Low Cost Carrier Terminal (LCCT) for Air Asia was approved, built and made operational in record speed with government’s support though Air Asia still complains LCCT is not sufficient for its needs, and that’s why the delays. Hasn’t Air Asia been using MAS resources and facilities and owed unpaid bills which govt helped settled?

MAS also requested additional routes within the region but weren’t these additional routes to Jakarta, Bali, Medan, Bangkok and new routes to Hadyai given to Air Asia?

Idris was charged with turning around MAS, and his plan made known to government was to rid the fats by divesting non-core assets, retrench staff, bring in people from outside, get some profitable routes.

Don’t know whether international routes will help MAS that much because one must understand that for it to profit from international routes, Kuala Lumpur must be an international commercial hub like Singapore or Hong Kong – which KL is not – for business and wealthy passengers to fly in and out first or business class as part of their companies’ business expenses paid for. Money is generally made from business and first class – not economy class that helps in breaking even per flight taking into consideration the high fuel prices today.

So MAS still need help in terms of local and regional routes but this market share has been taken and spread around with Air Asia.
Though MAS cannot fight or resist the policy of fair competition and based on concept of open skies, Idris’s turnaround plan, however, as earlier outlined to govt when he accepted appointment was based on the regional “open skies” agreement coming into force at the start of 2009 (so that he could have some breathing space to put MAS in firmer footing) rather than a year earlier, beginning of 2008!

Favoring MAS with Subang (with its proximity and access to the large Klang Valley market) is in fact tilting the level playing field back to it in recompense of it being tilted already too much to Air Asia against MAS’s commercial interests! (Spealing of level or unlevel playing field, I don’t believe the writer is giving a balance accounting of the larger picture of this so called ‘friendly’ rivalry and competition between MAS and Air Asia for market share).

Although both Air Asia and MAS serve the country and its people, like it or not, MAS is still the national airline, and if it continues to lose money without help, it is our money (the public purse) that will be used to bail it out!

So there’s no big deal in the government having share in MAS : the government’s golden share through Khazanah is to allow the government to have a final say on pivotal decisions.

Our Air Asia is doing OK. CITIGROUP Equity Research reported AirAsia could meet its FY07 recurring profit forecast of RM198 million or a reported profit of RM400 million, if the Malaysian Accounting Standards Board approved the inclusion of deferred tax credits in AirAsia’s audited accounts. From nature of its business – on line booking & payment – it could recoignise income even before the flight took off where some of the costs kick in! According to CITIGROUP Equity Research, with a PE of 22 times, AirAsia was trading at 23% premium to global sector peers with similar earnings per share growth and 24% premium to the Malaysian market.
What does MAS have going for it when Air Asia (with lower fixed & variable costs) is taking greater market share of and aserting dominant presence in the lucrative regional and domestic routes?

And what does MAS have on the other hand on its side?

One, is People are banking on Idis Jala’s performance; bankers are lending loans based on tenure matching in maturity with Idris tenure as CEO.

And of course, two, the traditional govt’ support that when things get bad, as when feul prices soar, relax and give time on leasing payments (a major cost item) due from MAS to govt owned Penerbangan Malaysia Berhad.