FAX: Let Firefly take over

[Naim 6]

i totally dun understand wat tony fernandez is doin....maybe he got something in plan...believe me..he is a genius...hehehe

 

The real genius(es) are the ppl advising him. I know one of them. To them bottom line is what matters, and FAX is not actually bottom line material. Simple plan lah. Make as much money as possible. If there's money, they may even go into airport construction and operations.

 

Anyway here's the latest.

 

April 13, 2007 01:02 AM

 

Government To Consider Firefly To Handle Rural Air Services

 

ALOR GAJAH, April 13 (Bernama) -- The government is prepared to look into the request from Fly Asian Xpress (FAX) for Firefly to take over the rural air services, Transport Minister Datuk Seri Chan Kong Choy said.

 

He said FAX director Datuk Tony Fernandes had made a verbal request on the matter and the latter had been asked to submit a written proposal.

 

"There appears to be some basis for the request. But we will look into the proposal thoroughly after we have received it," he told Bernama here Thursday night after the announcement of the Machap state seat by-election results.

 

Chan was commenting on the news report today that FAX has made a dramatic offer to the government that the newly launched Firefly airline wholly-owned by Malaysia Airlines (MAS), take over the operations of all rural air services.

 

Fernandes was reported as saying that FAX wanting to concentrate on its long-haul AirAsia X operations as the reason to give up rural air services.

 

FAX, a company that shares common directors with AirAsia, took over the rural air service operations from Malaysia Airlines (MAS) under the national air route rationalisation exercise last year.

 

Currently it is serving the rural air routes using eight turbo-propeller aircraft belonging to Penerbangan Nasional Berhad.

 

Firefly was launched two weeks ago and operates turbo-prop aircraft to various domestic and regional destinations from its base in Penang. It has started flights to Kuala Terengganu and Kota Baharu.

 

It plans to fly to Koh Samui in southern Thailand next month.

 

-- BERNAMA

[Jessnor Arif 1]

This Reply 36 from Mandala499 in Malaysian Aviation Thread in A.net i find the best assumption so far.

My participation here is long overdue...

My assumptions are simpler:

1. AK needs growth to prevent running out of cash, needs new ways to expand, or at least hold MH at bay... After all that, they realised the only large market to hit from Malaysia is the long haul market, but it's risky.

2. Solution found... "if only we have another AOC"

3. Goes to govt. and enters a deal to take over MH rural services, in exchange, new AOC... FAX!

4. Use FAX as instrument to enter long haul.

5. Dump the rural service back to MH.

 

Why? The long haul LCC market is risky and Air Asia is no charity. It made no sense for them to accept the rural services in the first place. With a new AOC, and use that AOC to launch long haul services, would prevent creditors from chasing AK if FAX long haul collapse. If FAX long haul succeeds, it would throw MH's focus into defending the long haul, therefore allowing AK to snipe at the markets it has experience in handling while MH's focus is elsewhere. Now if rural is handled by MH aswell, it would add problems to MH... and as a result, MH's BTP would be God knows where... and that would be a bonus for AK!

 

The govt. will also be worried if FAX fails, who's going to do the rural air service? AK itself won't do it... Hey, there's Firefly, why don't we let them do it (again)?

 

In my opinion, if the rural services is to be given back to Firefly/MH, then might aswell bring it all back to square 1 and cancel FAX's AOC at the same time. It would be interesting to see if AK would want those long haul routes under its own AOC...

 

Sorry to be skeptical/cynical... but hey, someone's gotta do it!

 

Mandala499

[Louis L. 2]

i have no idea for now...heheh...for me...both naim and jessnorarif's opinion make sense...but if jessnoarif's opnion is the fact,what a genius plan would it be...hehehe...naim,thx for the info anyway

[Khaled 2]

Government shouldn't even consider the request.

[Mushrif A 3]

His silly rationale is that there should be one turboprop domestic airlines....how about just one long haul airline, i.e. the incumbent?

[Radzi 2]

Beautiful answer, Mushrif.

[M. Sofian H. 0]

Mr Tony should participate RAJA LAWAK ASTRO

[Mohd Idham 0]

I agree....

[Yusoff 1]

Leave FireFly alone.... Just started barely weeks, already been given big plans?... plans that are stale...

[BC Tam 2]

How are we to know that FireFly was not established for this very purpose, ie undertake MH's RAS operations via FAX route ?

 

Please don't get me wrong, I'm of opinion it isn't quite right for FAX to try pass on 'obligations' of RAS to another party after having secured the more lucrative domestic routes upon undertaking of the said 'obligations'

 

But then, we should factor in other considerations :

1) Corporate-Political deals formulated behind the scenes, well, away from public scrutiny anyway

2) That is the way the corporate world works - if it ain't the goose laying the golden egg, pass the buck on to someone else !

 

[Fairul 0]

in Malay ( bahasa pasar)..there' a saying which goes...cakap tak serupa bikin..

[BC Tam 2]

in Malay ( bahasa pasar)..there' a saying which goes...cakap tak serupa bikin..

I reckon Bill Clinton's "being economical with the truth" comes quite close to that !!

[Jessnor Arif 1]

'MAS likely to back AirAsia proposal on rural flights'

Bussiness Times

 

• MALAYSIA Airlines (MAS) is likely to support budget carrier AirAsia Bhd's proposal to hand the rural air service (RAS) in Sabah and Sarawak back to the national carrier, industry observers say, despite protests from its employees.

   

• "This perhaps ties in with MAS' initial plan to continue operating the RAS as part of its original Business Turnaround Plan (BTP) announced in late 2005. "We, therefore, view such a potential development as possibly positive for MAS, as it will also enable MAS to operate a larger fleet of turbo-propeller aircraft as opposed to the two existing turbo-props," Aseambankers Malaysia Bhd said in its research report.

   

• The research house maintains a "buy" call on MAS with a target price of RM6.50 and a "hold" call on AirAsia with a fair value of RM1.68.

   

• OSK Research Sdn Bhd senior manager Chris Eng said AirAsia's suggestion makes sense, namely due to the understanding that the Government has yet to approve its request for higher subsidy payments, as what was requested by MAS previously.

   

• Another reason why it makes sense is that Fly Asian Xpress (FAX) has come under a lot of flak from different quarters in Sabah and Sarawak with regards to its flight schedules since it took over the service last August.

   

• The RAS operation is actually loss-making and subsidised by the Government. We believe the impact is negligible to AirAsia if the handover happens as it has yet to finalise its subsidy payments from the Government," Eng added.

   

• TA Securities Bhd analyst Rosnani Rasul believes that the Government is unlikely to allow FAX to hand over the RAS operation back to MAS. She said this is due to the "gentleman agreement" that AirAsia takes over the RAS, following the completion of the domestic air service rationalisation exercise which saw the budget carrier receiving 96 domestic routes.

   

• "In fact, we believe MAS would protest as it had embarked on a staff rationalisation programme which saw over 3,000 staff given a separation package in view of the reduced number of domestic routes. "This would mean that they would be understaffed if this (handover) were to happen." she added

[adrianqcs 0]

FAX Yet To Submit Paper On Giving Up Rural Air Service, Says Chan

April 16, 2007 16:34 PM E-mail this news to a friend Printable version of this news

 

PUTRAJAYA, April 16 (Bernama) -- Fly Asian Xpress (FAX) has yet to submit a formal proposal to the government on its intention to hand over its rural air services to Firefly, the newly-launched airline wholly-owned by Malaysia Airlines (MAS), Transport Minister Datuk Seri Chan Kong Choy said Monday.

 

"We are waiting for the formal proposal. Once received, we will study and make a decision," he told reporters after meeting the president of the International Civil Aviation Organisation, Roberto Kobeh Gonzalez, at his office here.

 

Gonzalez is on a four-day official visit until Wednesday to take a closer look at the country's aviation facilities and the Department of Civil Aviation.

 

Last week FAX director Datuk Tony Fernandes was reported to have made a verbal request on the matter and Chan had asked him for a written proposal.

 

FAX's offer for Firefly to take over the operations of all rural air services is reportedly because it wants to concentrate on its planned long-haul low-cost AirAsia X operations.

 

FAX, which shares common directors with AirAsia, took over the rural air service operations from MAS under the national air route rationalisation exercise last year.

 

Currently it is serving the rural air routes using eight turbo-propeller aircraft belonging to Penerbangan Nasional Bhd.

 

Firefly began service two weeks ago and operates turbo-prop aircraft to various domestic and regional destinations from its base in Penang. It has started flights to Kuala Terengganu and Kota Baharu.

 

It plans to fly to Koh Samui in southern Thailand next month.

 

-- BERNAMA

[Radzi 2]

Another blog here

 

 

[T Azahan 1]

what laaa tony..............

 

from day 1 we all know that rural air services is a social obligation by the government to the rural people. profit is not a motive at all because there is no way to make money in the first place. no matter how far u fine tune various formulas, it is impossible to make a positive bottom line.

 

firefly is a smart move by MH. its a niche market. it operates out of penang. its not a social obligation operation. its low cost but profit oriented. if rural air services is passed on to firefly, such move will disrupt its objective.

 

honestly i feel sorry for MH/firefly because they are always subject to unnecessary external distraction at times and for nothing, in which, might have negative impact on their improving operations.

[Naim 6]

April 19, 2007 17:13 PM

 

FAX Submits Paper To Give Up Air Services To Firefly

 

SEPANG, April 19 (Bernama) -- Fly Asian Xpress (FAX) has submitted a proposal to the Ministry of Transport on Tuesday to hand over the turbo-prop air services to Firefly, the newly-launched airline wholly-owned by Malaysia Airlines.

 

FAX chief executive officer, Raja Mohamad Azmi Raja Razali, said the airline would accept any decision made by the government on its proposal.

 

He also expected the ministry to make a decision on the matter as soon as possible.

 

"We will abide by whatever decision the government takes," he said here today.

 

FAX's offer for Firefly to take over the operations of all rural air services was reportedly because it wanted to focus on its planned long-haul low-cost AirAsia X operations.

 

Based in Miri, FAX operates 22 routes and 104 flights daily within Sabah and Sarawak.

 

-- BERNAMA

[M. Sofian H. 0]

SAY NO TO FIREFLY TAKE OVER FAX!!!!

 

TONY="MATA DUITAN"

 

 

[FK Wong 0]

Use FAX as instrument to enter long haul. quote by jessnorarif

 

That is the whole entire idea at the first place and the reason why they are eagerly willing to accept the rationalisation plan at the first place.

The sequence of events is in the such a way

 

a)after EAGERLY accepting the ratiolisation plan the first puzzle to solve is getting the rural areas to be serviced

b)pre-planned idea is to establish another company to run rural area services.

*why can't they run it under the name of AirAsia like what MAS did?

The idea of establishing another company is to obtain another C of O (certificate of operator)

that no one knows except for the people behind all these ideas know what the limitation of the C of O is.

We do know one thing, AirAsia has been finding various methods in expanding their routes as far as they could.

For an example Tony has been buying over operators and establishing another operator from abroad like ThaiAirasia and TuneAir

to operate further than just flying all around Malaysia which was the initial idea that every single malaysian have in their mind except for Tony and his Co.

Knowing that far only he could reach.He proposed the idea of taking over routes from MAS which is the rationalisation plan in order to achieve the idea of obtaining

another C of O.

After the rationalisation plan has been completed AirAsia X appear and now everyone can fly to MANCHESTER! everyone is wondering now where did they get approval to fly so FAR?

 

To be frank,i do acknowledge his(Tony) ability in turning things around the right way.But after taking what is necessary for him he'll leaving the bones behind for you which leaves a little eyesore

in each everyone of our eyes.And each time when things turn a little to be unfavourable for their side they will whine about it and end it by saying we'll leave to it to the government.like DUH!!!

 

c) Now they got what they wanted.It is time to hand back what we do not want and DRAGGING us down. The CEO of FAX said "it is a little distracting to manage the turboprop co and to concentrate on the long haul flights " if you can't manage it at the first place get of out the scene and return back EVERYTHING what you have right now so that MH can take it back as clean as a piece of white sheet paper.

 

My opinion to this case,if you want to return the rural routes.You have to return everything what you are having.Simple rule of thumb do not be too greedy.In life you gotta learn how to give and take at times.

Edited April 24, 2007 by FK Wong

[Jessnor Arif 1]

Use FAX as instrument to enter long haul. quote by jessnorarif

 

Hmm the credit is not mine... the quote is from Mandala99 from Airliners.net in Malaysian Aviation Thread

 

[Radzi 2]

Spot on, FK Wong.

 

I cannot see the logic on Firefly operating the RAS. I have not seen or heard anybody agree to this proposal in any forum anywhere. And I've lost my respect for Tony's (and co.) business ability.

 

Let me be the first to say this. Any official who agree to this proposal is a corrupt official and has a personal gain to make.

[Teoh Z Yao 0]

The more I hear the news, the more I'm pissed off with Tango Foxtrot...

[Leo 0]

Cabinet Nod For Firefly To Take Over FAX's Rural Services In Sabah & Sarawak

 

 

PETALING JAYA, April 25 (Bernama) -- The Cabinet today gave the nod for Malaysia Airlines's newly-established no-frills carrier, Firefly, to take over rural air services in Sabah and Sarawak now operated by Fly Asian Xpress (FAX).

 

Miri-based FAX, owned by some directors of AirAsia, operates 22 routes and 104 flights daily in Sabah and Sarawak.

 

Announcing this here, Transport Minister Datuk Seri Chan Kong Choy said the Cabinet today agreed to FAX's proposal submitted on April 17 to surrender its rural air services in Sabah and Sarawak to Firefly.

 

He said the government would subsidise the local rates by between RM50 million and RM70 million a year.

 

He also said the Ministry of Finance and the Transport Ministry will discuss details of the subsidy.

 

Chan said the government has given the assurance that the move would not affect MAS's turnaround plan.

 

"Any losses would be borne by the government," he said.

 

FAX's offer for Firefly to take over its rural air operations was reportedly due to it wanting to focus on its planned long-haul low-cost AirAsia X operations.

 

MAS managing director Idris Jala was recently quoted as saying that MAS would consider taking back the rural air service if it does not jeopardise the national carrier's turnaround plan.

 

 

 

-- BERNAMA

 

This is a bad move. What happen in the government that such move have been approved????

If it happen in other part of the world FAX will bring to court because they can't perform what they have promiss in the process of take over RAS that they have ensure to the government.

 

In another thought if RAS is a profit route I would not give out at all cost.

Edited April 25, 2007 by Leo

[Ewan Shamsudin 0]

Ditto.

[Naim 6]

I'm sick!

 

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