Letter
by Richard Teo
I wish to refer to the Malaysiakini article ‘Air Asia: Its like going to the Moon.’
Yes, Tony Fernandez and Air Asia has every right to be in a jubilant mood after having obtained the rights to fly the Kuala lumpur to Singapore route. After all its a gold mine route previously the monopoly of our MAS airline.
But why the sudden change of mind to give this lucrative route to Air Asia when the logical decision would be to allow the status quo to remain and let MAS reap the profits while it is on its path to recovery?
The answer can be found by referring to the ECM-Libra and the Avenue merger. Prior to the merger, Kallimullah and Khairy Jamalluddin (son-in Law of P.M) bought a block of shares in ECM-Libra and lo and behold one month later ECM-LIibra sealed the deal with the cash-rich Avenue merger. Of course someone at the Ministry of Finance had to approve the deal and guess
who?
If we were to recall a few months earlier, Kallimullah bought a stake in Air Asia. I am not sure whether Khairy has a stake in this deal but the deal is certainly very suspicious if not a bit
fishy because one month later, a smiling Tony Fernadez was gushing with pride and annoucing to the world that the Singapore route was like Air Asia going to the moon. And why not? It was like manna from heaven.
CEO of MAS, Idris Jala could not conceal his disappointment and who could blame him? It was a
lucrative and profitable route which MAS had prevously had sole monopoly and now it was to be shared with Air Asia.
Perhaps it would be appropriate to ask the P.M why the interest of the country’s own airline was sacrificed and why a public owned airline was given a share of the lucrative route?
The ECM-Libra and the Air Asia episodes seem to reveal a very ingeniuos and systematic way of plundering our nation’s wealth by our leaders.
Well done P.M. I didnt know you could do so well while sleeping on your job. Perhaps I was wrong.
#1 by madmix on Wednesday, 7 November 2007 - 11:11 am
Business in Malaysia has always been like that. Get the right connections to the power brokers and you get the best sweet heart deals: IPPs, Toll concessions, etc. This is no different. Air Asia started based on pure vision, hard work, now that it is such a big success, it has caught the attention of the greedy boys up there who wants a piece of the action. tony Fernandez is too glad to oblige.
#2 by TheWrathOfGrapes on Wednesday, 7 November 2007 - 11:17 am
/// Perhaps it would be appropriate to ask the P.M why the interest of the country’s own airline was sacrificed and why a public owned airline was given a share of the lucrative route? ///
Isn’t MAS also a public owned airline. Isn’t Air Asia Malaysia’s airline as well?
Where is the sacrifice? How is MAS sacrificed? MAS has grown fat on the SIN-KUL route. It is about time that they are given some real competition. Malaysians will be the real winners if the fares can be brought down substantially. Why should MAS be artificially propped up if the company is uncompetitive? Is this what national pride is all about? Propp up a dying company so that it can fly the flag. Like Proton.
#3 by undergrad2 on Wednesday, 7 November 2007 - 11:35 am
You do not have to be a rocket scientist to know that there is no such thing as a ‘free lunch’. Here is one traveler’s comment on Air Asia:
“That is, low service level, no fixed seats, no complimentary meals or drinks etc. But unless you’re taking a very long trip, all the money you save on your ticket might well make up for the reduced service.”
#4 by Godfather on Wednesday, 7 November 2007 - 11:41 am
Richard Teo is rehashing old news. Tell us something we don’t know. The link between Kallimullah, Lim Kian Onn, KJ, Tony Fernandez is well known in business circles. Add to it the Minister for AirAsia Chan Kong Choy and there can only be one winner in the turf war between MAS and AirAsia.
The opening of the KL – Singapore route is actually good for consumers. The MAS/SQ duopoly has been raping the consumer for far too long, and the likes of AirAsia and Tiger Airways can easily halve the travelling costs. I am not complaining.
#5 by seantang on Wednesday, 7 November 2007 - 11:45 am
Mr Teo makes a couple of assumptions on the best interests of the Malaysian public:
1. The cronies leeching off MAS is better for the best interests of the Malaysian public, compared to the cronies leeching off AirAsia.
How he comes to this ridiculous conclusion, I don’t know.
Cronies are bad. End of story.
If we can get rid of them, that’s great. But if can’t as yet, then gimme the cheap air tickets first. Don’t insult my intelligence by trying to split hairs between “national airline” cronies and “public airline” cronies.
2. The best interests of Malaysians are synonymous with the best interests of the “national” airline ie. MAS.
Tell me one “national” company in the ilk of MAS and Proton etc. that has actually benefitted the interests of the Malaysian public ie. man on the street.
All they ever result in is corruption, cronyism, high taxes and exorbitant consumer prices in the name of “national pride” (what’s the use of pride when one has no honour?) and the “national agenda” (somehow the happiness and living standards of the actual citizens do not figure prominently in this agenda).
So, Mr Teo, if there is any funny business with AirAsia’s entry into the KL-Sg route, investigate and punish by all means. But the MAS/SIA monopoly MUST GO!
#6 by Godfather on Wednesday, 7 November 2007 - 11:46 am
A confirmed return economy ticket on this route costs RM800, which is the highest cost per km of any route on MAS/SQ. Why wouldn’t we welcome competition ?
#7 by raven77 on Wednesday, 7 November 2007 - 12:04 pm
It really doesnt matter….because ultimately…..the public benefits……No point MAS making the profits and these profits make their way back to KJ and co anyway……..the opening up of the route should have been done ages ago……and the market must determine which is a better carrier…..by this rule alone…..MAS should have closed shop…..poor management must face the wrath of investors and the public…….they are the best auditors…….
#8 by Jimm on Wednesday, 7 November 2007 - 12:15 pm
Everything are highly ‘siphoned’ out under our nose each day.
As far as things in Malaysia still under their game plan, we might as well thank God that we still can keep standing.
#9 by Justicewanted on Wednesday, 7 November 2007 - 12:28 pm
Perhaps it would be appropriate to ask the P.M why the interest of the country’s own airline was sacrificed and why a public owned airline was given a share of the lucrative route?
——————————————-
Somebody bas also forgeted that SIA also benefited from the doupoly route??????
#10 by messy on Wednesday, 7 November 2007 - 2:29 pm
duh…of course air asia got it…all thx to the son-in-law
idris could have though of being the son-in-law in the first place
#11 by lppl on Wednesday, 7 November 2007 - 3:19 pm
ok, let’s make it straight. Now the gang get to access the fund in Avenue which ‘was’ G aka.tax payer money then they can afford to offer cheap fair to the public. Good. Looks like the public benefites. But wait, hmm..what if MAS plunge into red again, then G will definitely bail MAS out directly or indirectly because too much are at stake if G allowed it to gulung tikar. Guess whose money are the G using again?? Who is the real sucker then? wake up my friends..just like the Taglines for AVP- It’s our planet….It’s their war. Whoever wins… We lose.
#12 by seantang on Wednesday, 7 November 2007 - 5:00 pm
That’s why we need to gulung tikar the govt instead, no?
Root out the problem at the source.
#13 by HJ Angus on Wednesday, 7 November 2007 - 5:56 pm
Well the PM’s speech refers to the most wealthy in Malaysia not being by Malays to justify more NEP.
Guess NEP can also stand for “Never Enough Parasites”.
http://malaysiawatch3.blogspot.com/2007/11/another-nep-justification.html
#14 by HJ Angus on Wednesday, 7 November 2007 - 6:46 pm
typo sorry.
“Well the PM’s speech refers to the most wealthy in Malaysia not being headed by Malays to justify more NEP.”
#15 by lhteoh on Wednesday, 7 November 2007 - 7:45 pm
aiyea, this is how BN administered their policies. anything that is in their favour even it violates the rules and regulations is ok. We cannot do anything at this moment, but I am sure when time comes we know who to vote for. It takes no brainer to think for oppositions.
#16 by boh-liao on Wednesday, 7 November 2007 - 8:14 pm
PM argues that the list of the richest individuals in Malaysia is still being led by non-Malays even after almost 40 years of NEP.
He ignores the fact that there are Malays who are filthy rich but did not declare all their assets, and also there are now a large number of Malays who are filthy rich in all states of Malaysia.
His unemployed SIL is definitely one of them. Also Emperor Zakaria and almost all office bearers of Umno, ministers and state assemblymen from Umno, etc, etc, etc ………
#17 by Filibuster on Wednesday, 7 November 2007 - 10:44 pm
Seantang,
I don’t think much changes in this case with regards to the Singaporean side to the deal – as they (SIA) also own a budget airline , so the profits essentially go to the same parent company. We can’t say the same for the Malaysian side to things – it is now split open into a MAS / Air Asia battle. I agree with you in the sense that due to more open competition, we, the consumers win, because of the cheaper tickets that open up as companies compete to give the best value deal.
And because of precisely this factor, they believe we, the people, won’t investigate/check/go after them when it comes to any possible under table deals that go on. Whether anything happens now depends whether people are content with the expected price drop in tickets, or whether they believe that power has been abused, and that this matter should be brought up.
#18 by TheWrathOfGrapes on Wednesday, 7 November 2007 - 11:58 pm
/// Somebody bas also forgeted that SIA also benefited from the doupoly route?????? ///
No, it is understooded that nobody forgeted SIA benefited from the duopoly. The fact is SIA does not depend on the SIN/KUL route to survive; MAS does. Most of SIA’s routes are profitable and the SIN/KUL route probably account for less than 5% of SIA’s profit. OTOH, most of MAS’s routes are unprofitable and the SIN/KUL route probably account for more than 95% of its profits.
In any case, the decision to open the airspace is made at the government level, and not at the airline level. Singapore has been wanting more open sky agreements and more flights. Malaysia is stalling because it has to protect MAS.
#19 by undergrad2 on Thursday, 8 November 2007 - 12:06 am
I remember those early days when MSA split into SIA and MAS. MAS had a raw deal because it was left with heavy costs on the regional and domestic routes and not many international routes to service to make up for the loss incurred. It was done in the national interest and not out of any commercial interest.
The conflict of interest was what plagued the management of a national airline with MoF Inc. as the majority shareholder. Many years after, those same considerations still hold true. I believe it is not the business of governments to do business. I believe the business of government is to govern. Period.
Over the years taxpayers have been called again and again to meet their ‘obligations’ as citizens and bail out their national airline. But it is just in the nature of some Malaysians to whine about every change that occurs – even if it is for the better!
The writer says there is more than meets the eye and points to planned collusion between vested interests. So there is more but aren’t Malaysians reaping the benefit of this ‘change’. Why should Malaysian travelers complain about AirAsia flying into Singapore to drop passengers?
#20 by melurian on Thursday, 8 November 2007 - 1:55 am
so what, both are malaysian airlines and as long these airlines giving out cheap cheap tickets, we should be very happy instead. if mas to fall, serve it right for don’t know how to stay in competition, just like our proton. it will be great if fernandez emulate ryan air giving free ticket, then i don’t care if mas to gulung tikar…..
#21 by Richard Teo on Thursday, 8 November 2007 - 2:02 am
Isnt there a law against insider trading?Yes buying Air Asia shares knowing that approval would be obtained for the K.L singapore route for Air Asia?
What happens later when MAS makes a loss.?As a GLC govt would once again use tax payers money to bail it out.While Air Asia and the shareholders laugh their way to the bank.yes the ordinary citizens get to have cheaper flights to Singapore.Is that a really good bargain for the country?
#22 by undergrad2 on Thursday, 8 November 2007 - 5:14 am
The collusion between government leaders and big business interests is nothing new.
The politically connected and the powerful have never been bothered by rumours of ‘insider trading’. Why should they be now? Nobody over the last two or so decades has ever been accused let alone prosecuted for the crime of insider trading. In fact ask those who routinely indulge in insider trading what ‘insider trading’ is and they would either give you a blank stare or show you the index finger or both.
#23 by Godfather on Thursday, 8 November 2007 - 10:26 am
Richard:
Yes, there are insider trading laws in Biolehland, but like all laws here, they are only applied to those who don’t play “ball” with the powers-that-be. Who is going to charge Kalimullah or Lim Kian Onn or Tony Fernandez? Better still, who is going to charge SIL or Chan Kong Choy or any member of the cabinet who has advance notice of the AirAsia “gift”?
What happens later when MAS makes a loss ? MAS depends on the Singapore/KL route for its annual profits ? No, it is a lucrative route but flying that route alone isn’t going to turn the airline around. It will need to be bailed out at some point (again) even if it retains its duopoly on the KL/Singapore route. It is a question of “when”, not “if”.
In the meantime, the opening of the route means cheaper travel for many of us. Those who take the route every week can halve their costs.
In short, you may question the double standards for insider trading enforcement, but you should not question the true benefits of opening the particular sector to real competition.
#24 by negarawan on Thursday, 8 November 2007 - 1:34 pm
Khairy has a large piece of land at the island end of the 2nd Penang bridge. He is sitting on a gold mine. How did he identify that piece of land well before the public announcement of the 2nd bridge? How did he get the fast approval to buy that land? Must be over lunch or dinner with his father-in-law. This is another example of how umnoputras are plundering the wealth of the country at the expense of the rakyat. The land is being leased to a gas company in Penang to store their cylinders at present.
#25 by Mr. on Saturday, 10 November 2007 - 12:03 am
“The conflict of interest was what plagued the management of a national airline with MoF Inc. as the majority shareholder. Many years after, those same considerations still hold true. I believe it is not the business of governments to do business. I believe the business of government is to govern. Period.”
I second that, Malaysian politics needs an jump in evolution. Governing principles need to be audited & realigned, this sooner than later.
#26 by lopez on Thursday, 7 May 2009 - 10:48 pm
What is this everyone can is entitled his share of prosperity, except some who cannot bear the idea that he is enriching the other fellow.
Like MOT has thier fair share of billions in super not so free port, MOE has their schools but without furniture MOS also have many state of art sports building but used by national rubber leg sportsmens
SO MOO must have something too….
hey what is MOO?
ministry of oversight..new leh
wait i think you know this one MOOz
like all bolihland road user , pay that dollar laah otherwise late for meeting aledi lah…
I dont care who flies there …if it is cheap to my pocket what the heell man, book a flight quick
the real problem …it should have been much much cheaper….if….if….
what is it for you , you think step down got no costs meh?
even go toilet need to pay mah…..
this is the culture..if you can afford it dont even die.