MAS and AirAsia Shares Swap

[Cheng Long 0]

C'mon they can't be more serious!! There will definitely be conflict of interest if this happens.

 

 

 

All MH needs to do is to hire someone as good as TF who can really run the show, instead of letting some jokers running it.

 

Yes, shouldn't be allowed to happen. Just too much conflict of interest. Bad for MAS and bad for the public. Do you really think TF gives a hoot about MAS and wants to bring them to them former glory...

[Naim 6]

Maybe the 'plan' to move HQ to Jakarta part of the shadowplay for this?

[Johan Z 0]

Will this turn MH around? Hardly if government still intervenes.

[Sri Ramani K. 0]

To be on the bright side, I think it is a good move. Especially, no more buyouts can be expected after this. Hopefully!

[Andi C 0]

So D7 should finally get SYD?

[KelvinL 0]

Read the news and stunned, never know that MH needs so badly of AK to join in as share holder. With the maturity of the company it is a shame to the nation. They still need to be babysit & fed. Everytime I look up to the sky (out of 10 planes flying above - 7 is Red colour & just 3 with a wau logo) I suppose in the near future this will change, and even the turbo props will be in red tail. Yeah Subang airport, we will be back to paint the place red.

[T Azahan 1]

In my honest opinion, the most ideal person to be CEO/MD of MH is Tony himself. How i wish there were no conflict but he is the best chap around to lead the Company. I am definite should he be one, the Company shall perform.

 

I see the current management of MH lacks the depth of competitors' products and offerings.

[Isaac 0]

This is going to be very bad to the consumers. Why can't they find some other investors anyway ?

[Keith Ng 0]

Maybe the 'plan' to move HQ to Jakarta part of the shadowplay for this? <sigh>

 

Maybe is the "I give you 20%, you don't move your HQ to Jakarta" kind of thing.

 

But from my point of view, I think is not a good move.

I think most of the staff in MH won't like it.

[J Chong 0]

All MH needs to do is to hire someone as good as TF who can really run the show, instead of letting some jokers running it.

 

not possible when most high level appointments in this country is politically linked. Anyone seen Al-Jazeera's interview with our Info Minister? I was cringing at his English, grammar, comprehension...

 

Really shameful. This just another straw in their cap.

[KK Lee 5]

Guess MH will be going though more rounds of transformation. How much can MH transform will largely depend on how much free hand is given to the new CEO, unless the new CEO is allowed to terminate many of lopsided contracts e.g. LSG, reduce head count, appoint Malaysians who worked at SQ or AK to the top management, contract MH veterans, etc it will be another old wine in new bottle and we can expect yet another round of clean up and transformation in 5 to 7 years time

 

Believe the first batch of people should be terminated are those mooted to establish FY. The sole objective for MH to establish FY was to counter AK. After FY is established, relative overhead increased and marginal income reduced at MH which contributed to the current loss. As long as FY cost is transferred to MH, MH is unlikely to be profitable.

 

On FY, believe there are a number of people are keen to take over FY. Since AK have a hold on MH, it will be in public interest that FY is sold to a third party.

 

To be profitable in regional and long haul, MH need to replace 772 with 332 than later with either A350 or 787.

 

Last but not least, this is another opportunity for MH to abolish business model/culture inherited from Mr 019.

 

Guess those at MH who pressed to cancel TF’s travel discount a few years ago are having sleepless night What goes around comes around

 

Edited August 6, 2011 by KK Lee

[Rob 0]

Wow this is some unsettling turn for the books!

[Pieter C. 5]

AK is no doubt a very independent airlines which can make lots of profits, the biggest and best low cost airlines in the world.

 

Southwest in the US is way bigger...

 

Yeah, surprising move...hopefully it will go thru monday after last week's dramatic drop of the worldwide share-markets...

[Izanee 0]

OMG WTF ROTFL

 

i am simply speechless by this wayang kulit ... what the hell are the garmen thinking about? TF is laughing to himself ...finally got what he wanted. some serious hanky panky going on behind the scenes

[Christopher Lim 0]

Tony, I see where you are going with this man. The best and fastest way to destroy competitor is from the inside out. Trojan Horse style. Let them let you into their house first, then only do your damage.

 

1st thing, give Sydney route to AirAsia X.

 

Next, cut off everything that is unprofitable for premium travel and give to AirAsia to take over.

 

Left is a tiny but profitable portion of MAS market share for premium travellers. Rename MAS to AA$ (Air Asia $) the premium affiliate of AirAsia group.

 

Great success.

 

Who lose? We the consumer.Airtravel monopoly again.

 

Who win? Cronies in current regime and Tony. They also know how to play Trojan horse. As the saying goes, if you can't beat 'em, get 'em to come over. Let him into your house and make him your family member.

[CH Teo 0]

No matter how this gonna be, choices is still need; we already had limited choices, can't imagine back to the monopoly days...anyway, some consolidation is good, as there is something that can be done to further improve the connectivity domestically or internationally...

For MASwings, I believe it will stay as it be; unless the government has some other plans...it is meant for RAS in Borneo anyway from the very beginning, although Sabah and Sarawak government now calls for regional services...

FY services is the question if this is true, just waits for now I guess...

[flee 5]

From The Star: http://thestar.com.my/news/story.asp?file=/2011/8/7/nation/9255271&sec=nation

 

KUALA LUMPUR: Malaysia Airlines (MAS) and AirAsia will swap shares in a surprise deal which will see Tan Sri Tony Fernandes becoming the single biggest shareholder.

 

Khazanah Nasional Bhd, which owns over 17% of MAS, is said to have concluded negotiations with Fernandes to come up with a deal to save the national carrier.

 

Sources said the deal, which was struck last week after negotiations over the past year, became urgent after MAS' poor showing in the last two quarters.

 

Fernandes is set to get 20% of MAS equity under the deal that is to be signed next week, with some sources saying it has already received the Government's approval and could be inked by tomorrow.

 

Industry players expressed surprise at the deal because of past animosity between the management of the two airlines.

 

Those who were aware of the negotiations were also surprised at the speed at which it was concluded.

 

At present, Khazanah, a strategic investment company, holds about 17% stake in MAS, and under the deal with Tune Air Sdn Bhd, it will get a similar stake in AirAsia. Fernandes and his co-founder partner Datuk Kamarudin Meranun hold 26.28% in the world's biggest budget airline.

 

Fernandes declined to comment when asked about the deal.

 

Insiders in both airlines confirmed that the negotiations concentrated on the synergy such a share swap would bring.

 

First, there will be rationalising of routes. Between them, the two airlines cover most of the lucrative routes from Asia to Europe.

 

Second, when they are seen as a single unit, their bargaining power with airports and aircraft manufacturers will double, said a source close to the deal.

 

He pointed to the recent move to merge SapuraCrest Petroleum and Kencana Petro-leum via a share swap as an example for the AirAsia-MAS deal.

 

Insiders said it was unlikely the two airlines would merge into a single unit, but would operate though separate managements at operational level, while sharing common directors and policies.

 

Malaysia will get the best of both worlds a premier full-service carrier in MAS and the best budget carrier in AirAsia.

 

“They have been competing with each other for too long, and it's time to work together because there is more than enough to go around,” said a senior government official.

 

The official added that the “feud” between the two had been going on for 10 years since Fernandes and others took over the ailing AirAsia from DRB Hicom.

 

AirAsia is twice as big as MAS in terms of market capitalisation. MAS is worth about RM5.3bil, while Fernandes' outfit is worth slightly more than RM11bil.

 

AirAsia stocks closed at RM3.95 per share yesterday while MAS' was at RM1.60.

 

A news portal, The Malaysian Insider, which broke the story of the deal yesterday, reported that Fernandes would likely appoint Khazanah's executive director of investments Mohd Rashdan Mohd Yusof as chief operating officer after the share swap. Rashdan already sits on the MAS board.

 

Sources said no decision was made about the position of MAS CEO Tengku Datuk Azmil Zahruddin.

 

MAS recorded a first quarter net loss of RM242.3mil against a profit of RM310.6mil in the same period last year. Analysts expect the national carrier to make full-year operating losses due to high fuel costs and falling yields.

 

In contrast, AirAsia recorded a first quarter profit of RM171.9mil for this year and a record RM1.5bil in profits for 2010.

 

Sources said the merger would also force the two airlines to take stock of their future aircraft purchases if they are to enjoy any synergy.

 

AirAsia purchased 200 Airbus A320 aircraft earlier this year with an option to buy another 100, while MAS was set to make a decision on the replacement aircraft for its Boeing 747 and 777 fleet, which is more than 20 years old.

[Rob 0]

I hope this doesn't have any bearing on MH's entrance into OW.

[BC Tam 2]

We must realize though that pending an official announcement from AK/Tune Air/MH/Khazanah/Petronas (and/or whoever & whichever having a finger in the pie), this remains an unconfirmed rumour

Which allows for a bit of latitude amongst us sceptics to ponder upon motive(s) behind the supposed deal

 

First off, I'll opine

.....will see Tan Sri Tony Fernandes help stop the ailing flag carrier from plunging any further into red ink .....[end quote] is utter, complete b...... well, inspiring Put yourself in dah man's shoes - you're riding high, your bitter rival is on her knees, and you stoop down to help pull her up from drowning in red ink ? Magnanimity of such order is plain suicidal

 

What that is most revealing (imo) should be that

..... MAS’s main shareholder Khazanah Nasional Berhad and the AirAsia boss have negotiated five separate times previously .....[end quote] Dah man would then already have a pretty good idea of what is wanted and required. Probably indicates the cherry is now irrisistably ripe for picking - the move to Jakarta possibly an attempt to save a portion of the crop from poachers

 

Should 'they' deign to clarify on Monday as expected, I believe the figures will reveal much much more than what the customary PR prepared sweet talk will have us believe

[leon t 0]

believed that ak is asked by govt or someone to do so and this 20% share is onlyh the beginning as it will surely risein near future. Not sure if this is a good thing for ak too - as it will be saddled with MH problems and "financial leakages" and MH less than productive staff. And then there's the issue of what to do with so many 738s that firefly n MH has ordered n many are not delivered as yet. Yes that would also mean the end of firefly's jet services n competiton to ak. As papers mentioned Tony will have a say in mh n its "fleet rationalisation" will see MH ordering mainly from Airbus for its renewal.

Perhaps Tony will try n reduce MH's A380 fleet as he shd know that its too big for MH and also to retain its yields.

[KK Lee 5]

Perhaps Tony will try n reduce MH's A380 fleet as he shd know that its too big for MH and also to retain its yields.

 

To operate a 500 seat aircraft on a 300 pax demand route is consider too big. If the route demand is 2000 pax, 500 seat aircraft is not considered oversized. If airline couldn’t fill 400 seat aircraft on a 2000 pax route is not about aircraft capacity but inability of the airline.

 

Given SQ discipline and culture is a bitter pill unlikely taken by gomen and many at MH, Virgin Atlantic business model is proven, vibrant, fun and profitable, and Sir Richard Branson is TF buddy, adopting VS model on MH is a viable and profitable proposition

 

Edited August 7, 2011 by KK Lee

[filipeseda 0]

Perhaps Tony will try n reduce MH's A380 fleet as he shd know that its too big for MH and also to retain its yields.

 

 

I believe he will probably not reduce MHs A380 fleet. Firstly, MOT clearly does not want MH to cancel any of its A380 orders. Also, MH will finally be able to compete with dear SQ down south on the kangaroo route and hence probably see organic growth. MHs current long-haul fleet are just a bunch of time machines.

 

In terms of route rationalisation, this may actually be a good thing. However, I don't think that we'll see a huge cut in routes. If that does happen, then MH will pretty much become a useless carrier. Perhaps, what we'll see is more like what SQ has. A premier airline and at the same time a long-haul budget carrier and at the same time owns 49% of Tiger.

 

More overly, this may actually be a VERY positive thing. For once, MH and AK will finally see themselves serving different markets. Tony has very good management and business skills. MH will finally see itself as a full service carrier and raise the heat on SQ.

[flee 5]

Perhaps Tony will try n reduce MH's A380 fleet as he shd know that its too big for MH and also to retain its yields.

MH sorely needs an up-to-date long haul product that its current B744s and B772s sorely lack. Taking the A380s on board would be a very positive thing for MH to do. It can then retire the ageing and fuel hungry B744s.

 

Perhaps, PMB can lease these old B744s to D7 for RM 1. Then D7 can refurbish them for long haul ops to Europe/US, with the upper deck equipped for premium economy. D7 can ply the routes that MH found hard to make a profit.

 

The govt. has finally got its grubby hands on AirAsia - AirAsia will now be a GLC too. This deal will either rescue MH or pull AK into the blackhole. It will be very interesting times for aviation observers but might not be so good for the consumers.

Edited August 7, 2011 by flee

[leon t 0]

filipeseda - believed that MH cannot be seen in the same light as SQ or even be compared to SQ - as MH itself have alot of soul searching and unless its all revamp from the ground up - it can never be compared to SQ or even CX

 

as is even on its direct monopoly routes to LHR and even SYD - MH for so long still is unable to fill up its capapcity or even extend it and still have to even downgrade its 744s from 2 daily n reduce capacity by using a 772. Moreever remember even its US flights ie to LAX and Newark have been reduced significantly and even abandoned.

[Lock SH 0]

I am waiting patiently to see what TF would/could do to get rid of those leeches (read : cronies) who have been using tunnel boring machine (TBM) to dig holes in MAS before ........