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Woes keep piling up on Tony F

 | March 21, 2012

Even the most ardent fans can see that there's a lot of ‘unhappiness’ with the AirAsia boss.

It must be finally conceded by even the most ardent fans of Tony Fernandes, AirAsia’s flamboyant founder-chief, that there’s quite a bit of unhappiness going around these days over him.

The latest bout of unhappiness with Fernandes is that the Malaysian Airlines Union is crying “foul” over the recent share-swap arrangement which gave him and his partner Kamarudin Meranun, seats on the board of directors of Malaysia Airlines.

That’s like inviting the proverbial thieves to guard the bank, the union complains, but as usual there’s more to it than meets the eye.

For others, the fact that the duo can seemingly come from nowhere and take over the MAS board of directors under Malaysia Boleh is simply too much – read bangsa, agama, negara – for them to stomach. They wonder whether it’s curtains this time for Umno’s oft-repeated mantra on its three sacred cows.

The truth, they say, is always in between somewhere.

The “guilty duo” claims that they are thinking out of the box while performing a patriotic duty: staving off a possible third round of bankruptcy for the beleaguered national flag-carrier. In pursuing this line, they have apparently staked their entire history and future with AirAsia.

Khazanah Nasional Bhd has taken a 10% stake in AirAsia by way of a 50% stake in Tune Air Sdn Bhd which holds only 20% of the airline stock. In return, Khazanah has handed Fernandes and partner, more accurately Tune Air, a 20.5% stake in Malaysia Airlines. At the same time, Khazanah Nasional has refused to hand over its AirAsia stake to Malaysia Airlines and thereby give the national flag-carrier a much-needed income stream to help blot over its latest figures in red ink to the tune of RM2.52 billion.

Critics are just focusing on the 10% and 20.5% instead of reading the figures accurately for what they actually mean, that is, Fernandes is on the verge of losing control of AirAsia Malaysia to Khazanah Nasional. These are the same people who virtually ran Malaysia Airlines to the ground – three times in a row – with the reverse of the Midas touch.

Fernandes has cut many routes from MAS’ network to get the airline to focus on the medium- and long-haul sectors while AirAsia will focus on the short- and medium-haul sectors.

Lucrative role

The competition between AirAsia and MAS will be in the medium-haul sector. The national airline will compete to a limited extent with AirAsia X in the long-haul sector but only if the former gives up a route.

In that sense, the flag-carrier’s role – the bane of Malaysia Airlines – will still be performed but by AirAsia X which has already started cutting routes like crazy in the wake of the steep fuel price increases.

FireFly, MAS’ subsidiary, will have to keep out of the Sabah-Sarawak sector which will be a battleground between AirAsia and MasWings, another MAS’ subsidiary.

MAS and AirAsia are also jointly buying fuel to enjoy economies of scale. Besides, the latter has always hedged its fuel prices better than the former.

MAS needs the arrangement more than AirAsia but there are those at the national airline who are unhappy because the lucrative role of the middlemen in fuel purchases has been cut out.

There’s little that Fernandes and partner, unlike Idris Jala, can do or want to do about the politics of patronage which governs the award of contracts at MAS.

That continues to be a bottomless pit responsible for drowning Malaysia Airlines in a sea of red ink and one which Jala “naively” reversed, albeit momentarily, before he was moved sideways into counting papers clips and stacking papers to gather dust at the Prime Minister’s Department.

The MAS Union, which obviously can’t see beyond its nose, is not at all happy that all the route changes brought about by Fernandes and silent partner would mean that as many as two-thirds of the 20,000-strong workforce, many of them in Selangor, would be laid off. That’s a lot of votes in an opposition-ruled state. There are those who say that Umno is being forced to choose between MAS and Selangor.

So, it can be said that Fernandes’s woes are mounting in Malaysia, given the step-motherly treatment he gets.

Already, many professional AirAsia-haters have publicly sworn against flying the airline even in their coffins unless and until they get free what they already enjoy for “free” on board Malaysia Airlines: free food (RM75 per serving for nasi lemak, for example, hidden in the ticket price), aerobridge, seat selection, insurance and the like.

Whacked both ways

The fact that MAS ticket prices are in the stratosphere seems to be beside the point since not everyone knows how to count.

To “add insult to injury”, obviously, the government has since announced that it has virtually given AirAsia a licence to confuse the market when publishing its fares. The fact that there’s really no confusion about AirAsia fares, again, seems to be beside the proverbial point for many critics.

So, there’s a limit to how much anyone can defend the man, notwithstanding of course his universally acclaimed role as the god of marketing in Southeast Asia.

That goes for his ardent admirers as well who have since strangely fallen a silent lot in hiding. They believe that their hero has this time bitten off more than what he can chew. They would have preferred him to focus on AirAsia and continue giving them low fares. They can’t understand what he’s up to at MAS and fear that AirAsia fares can only go up as a result.

So, it seems that Fernandes is getting whacked both ways – by those who only can find reasons to hate him and by those who until yesterday loved him like crazy and are hesitating whether to stand by him.

Fernandes took over AirAsia in 2001. But he was not expected to do well when DRB-Hicom dumped its RM40 million debt on him, under the guise of parting with the airline for a token RM1. Not surprisingly, Malaysian banks would not touch the new AirAsia chief with even a ten-foot pole and avoided him like the plague. There were allegations about racism and the like.

In fact, it would be more accurate to downgrade Fernandes a little and describe him more accurately as great rescuer-chief since AirAsia was apparently already known by that name in 1993 while still with DRB-Hicom and having only two small planes.

This in itself has been a source of great unhappiness among many people – not given to swearing by the brightest and best to lead us all – because Fernandes, being obviously too smart for his own good, has since insisted on rubbing everyone’s noses in the dirt and making them all look bad.

No doubt he has been too long away from the country, in England and elsewhere, to know that things are not done in a certain way in the country under the mediocrity that Umno swears by.

Also read:

Kesatuan pekerja mahu perjanjian AirAsia-MAS dibatalkan


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