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Has MAS lost millions carrying Air Asia X passengers?

 | 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.


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