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Open Debate, MH vs. AK

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It was on the news last night! Where Datuk Tony (AK) invited his counterpart, Datuk Idris (MH) to have a debate session, live on TV.

 

It looks like the situation is getting hotter!

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It was on the news last night! Where Datuk Tony (AK) invited his counterpart, Datuk Idris (MH) to have a debate session, live on TV.

 

It looks like the situation is getting hotter!

 

Action speaks more than words lah. Give more discount/free seats!

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While the war between AK and MH is good for us the consumer on the short term, on the long term it MAY have a negative effect for both airlines. I am sure we don't want any one of them to fail. This kind of promotions surely cannot be sustained on the long run.

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I think that was bad PR from Tony. Why would MH's CEO would want to waste his time in an open debate? What does it achieve?

 

With that outburst, it just shows that AK is feeling the heat from MH's campaign. MH's campaign is not sustainable in its present form given its cost-base and is only for limited number of seats. I think AK's cashflow is severely dented by MH's promo, and perhaps AK is getting financially vulnerable.

 

 

 

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I think that was bad PR from Tony. Why would MH's CEO would want to waste his time in an open debate? What does it achieve?

This reminds me of another scenario, although much more microscopic in scale, where a certain someone in this forum was so eager on a 'face to face' debate about certain issues pertaining to his employer. The only thing is that, on the contrary, that certain someone is from MH.

 

Why would one waste his time in a open 'face to face' debate, over teh tarik some more? What does it achieve? :)

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"Red belongs to us...and MH even use the same font with us in their advert"

 

If I am not mistaken, AK used to have some sort of advert condemning other LCC like FY before....

correct me if i am wrong...

 

Anyway...it's all about business! There are time you are on the top, and when you are on the top, don't forget to look down! Rite?

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For TF to resolve to open debate is not much different from fist fight in a pub could means TF has run out of idea.

 

Guess it is about time to offload AK shares.

 

:drinks:

 

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Please lah all of you nay-sayers. AK will not fail all because MAS is having this one off RM0 fares promotion. This is a short term strategy from MH because we all know it cannot be sustained at all. If Tony wants to get his panties all knotted up in a wedgie, let him be but he did bring up some very pertinent pointers about MH.

 

I have my bets cast for AK to keep on flying and MH to stop this silly promo for the sake of maintaining their image as a premium carrier. Want to compete, pick on someone your own size.

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Sure thing we as consumers will be the best gainers...

Edited by Ignatius

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...

I have my bets cast for AK to keep on flying and MH to stop this silly promo for the sake of maintaining their image as a premium carrier. Want to compete, pick on someone your own size.

 

 

Didn't Tony claim AK's cost at 2.33 cents/seat/km is among lowest in the world, and easily 30% of MH's? Then he should be able to survive. :)

 

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Didn't Tony claim AK's cost at 2.33 cents/seat/km is among lowest in the world, and easily 30% of MH's? Then he should be able to survive. :)

 

No doubt MH is picking a fight with AK by intruding into the low cost segment, but AK is taking the bait. If AK is confident of their own thoughts (i.e. the lowest cost/km, people just want to fly from point A to point B and other issues including getting a window seat does not matter) then they shouldn't be bothered about what MH do.

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No doubt MH is picking a fight with AK by intruding into the low cost segment, but AK is taking the bait

That in essence I suppose is what is going on - good call !

 

Having said that, it is widely believed that the 4th floor drivers have lost considerable vigour since that early morning in March. It would be mere speculation on my part here, but possibly someone trying to hammer the nails into AK's prospects here with this innocent looking zero fare campaign ? :)

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Dato Tony's demand on news tonite:

 

1. Equal subsidy given to MAS and AirAsia

2. Subang shouldn't be used even for propeller aircraft

3. Equal right to fly, especially on KUL - SIN vv. route

 

Tonite, even the minister has got to campurtangan....

 

 

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AirAsia is inferior now. If today MAS is not the opponent, and another LCC is the competitor, i wonder how AirAsia react. AirAsia just couldn't get over the deals offered by MH.

 

MH rocks!

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"Red belongs to us...and MH even use the same font with us in their advert"

 

If I am not mistaken, AK used to have some sort of advert condemning other LCC like FY before....

correct me if i am wrong...

 

Anyway...it's all about business! There are time you are on the top, and when you are on the top, don't forget to look down! Rite?

 

dont forget AK's "un-MaHal" advertising campaign in the papers...

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May 16, 2008 00:00 AM

 

Debate Between MAS And AirAsia Unlikely Event

 

KUALA LUMPUR, May 15 (Bernama) -- The likelyhood of a public debate between Malaysia Airlines managing director/chief executive officer Datuk Seri Idris Jala and AirAsia chief executive Datuk Tony Fernandes on the aviation industry is now very remote.

 

"I do not have the time nor the interest, to indulge in such futile exercises when there are other priorities that I need to attend to," said Idris in a statement released by Malaysia Airlines.

 

"I am just a simple guy who just wants to do everything he can under the extremely tough operating environment, and to ensure that Malaysia Airlines continues to deliver the highest quality products and services at affordable prices," he said.

 

Idris noted that AirAsia has also been giving away free seats for years without any protest by Malaysia Airlines.

 

Ironically, Tony Fernandes has claimed that his sales have increased by 20 percent when MAS launched its Everyday Low Fares (ELF) and is still unhappy about it, he said.

 

The Malaysia Airlines head honcho also categorically denied the accusation by Tony Fernandes that MAS was using international subsidies to fund ELF.

 

In a long reply to Tony Fernandes recent challenges and statement, Idris said the recent launch of Malaysia Airlines' Everyday Low Fares, was to help the national carrier to manage its inventory of seats much more efficiently and most importantly, ensure that it minimises its costs.

 

Malaysia Airlines acknowledged that the campaign has more than ruffled a few feathers in the airline industry, with accusations by its competitor that the national carrier is indulging in unfair competition and predatory pricing, but Idris said "nothing could be further than the truth".

 

"We have an average seat-factor of 70 percent, which means that our planes are taking off with 30 percent of the seats unsold. With sky-rocketing fuel prices today, this means that every unsold seat adds on to our overall costs," he said.

 

He said Malaysia Airlines' move was simply to recover part of the sunk costs through the fuel surcharges.

 

He said unsold airline seats are like supermarket goods, which will go to waste closer to departure date of the flights.

 

All supermarkets slash prices before the expiry of the shelf life of these goods in order to minimise wastage and recover part of their costs, he said.

 

Yet, the supermarkets are still thriving and continue to be successful in attracting their own loyal customers to their outlets, he added.

 

As such, Idris questioned why the airline business should be any different in the manner the airlines dispose of their 'perishable' goods, which are the unsold seats, or why there is such a big fuss over its ELF program.

 

Ultimately, it is all about minimisation and recovery of costs which are escalating rapidly.

 

He said the incremental cost of an ELF seat is approximately RM25.00-RM35.00.

 

Since the average charge is RM90.00 per seat, the ELF campaign is totally self funded, he added.

 

Idris also pointed out that AirAsia has been given various forms of subsidies including initially zero and subsequently lower airport charges as well as funding of the budget airline's brand on the English Premier League referees, not to mention outstanding amounts owed by AirAsia/FAX to MAS and Penerbangan Malaysia.

 

"In our Business Turnaround Plan (BTP), we clearly stated that we will take back full accountability for our P&L statement without subsidies but we also said that we must be given the freedom to operate our business as a commercial venture," he said.

 

He said Prime Minister Datuk Seri Abdullah Ahmad Badawi has clearly stated publicly that the Government would not bail out the airline financially.

 

"This is a good thing because it forced accountability and consequently, we must fix our own financial problems without any aid from the Government. In line with this, we now run our business as a commercial entity," he said.

 

In the last two years, MAS has axed several international routes which were not commercially viable as part of its Business Turnaround Plan, he said.

 

These routes, which include KL-Vienna, KL-Manchester, KL-Kuching-Perth, KL-Penang-London, KL-Langkawi-London and KL-Cairo, account for some seven percent of MAS total network capacity.

 

On the domestic sector, Idris said, "When we were asked by the Government to take back the rural air services from AirAsia/FAX, we agreed that we would only take them back with subsidies from the Government," he said.

 

AirAsia/FAX also obtained subsidies for rural air services when they operated these routes, he said, adding that in the spirit of transparency, MasWings was formed so that there is clear separation of the P&L statement between MAS and MasWings.

 

Idris also commented on the impending liberalisation of the ASEAN air routes and MAS' reaction to this development.

 

He said, "All ASEAN countries have agreed to the ASEAN liberalisation roadmap which allows for the liberalisation between the capital cities starting January 2009.

 

"But our competitor lobbied intensely for the premature opening of this route, despite the clearly agreed time-table by all the ASEAN Government. And despite our protest, this route is now partially open.

 

"While we accept open competition, we also believe that there should not be any change in "goal-post".

 

"Although we are not happy, we have graciously accepted the Government's decision to allow budget airlines to ply the sector."

 

Based on the ASEAN liberalisation time-table, AirAsia is free to fly as frequently as it wants to between KL and Singapore, he added.

 

-- BERNAMA

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red is not belongs to airasia..mh using red too..look at mh logo?(blue and red)mh only promote everyday low fares to sell 30% seat unsole.and goverment cant treated airasia like mh.mh is malaysia carrier airlines,5 star airlines and already 60 year in aviation .airasia is only low cost and only 7 year in business.im suprised what airasia say.usually what i see airasia always copy mh not mh copy airasia.airasia lucky goverment give green light to fly to singapore 2 daily. :yahoo: quote name='Alif A. F.' date='May 15 2008, 09:56 PM' post='171738']

dont forget AK's "un-MaHal" advertising campaign in the papers...

Edited by mohd sukri abd hamid

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"Action Speaks Louder Than Words". I agree with that. Stop wasting time with talks and talks and nothing came up in the end. Keep the promotions coming. More daring than the rest. Good for us then.

 

And mr TF, c'mon. Fonts belongs to us, Red belongs to us. You copy us. You this, you that. Please stop talking like school boys jeering at each other. Everytime he speaks up, I remembered the RAS story.... sheezz...

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"Red belongs to us...and MH even use the same font with us in their advert"

 

If I am not mistaken, AK used to have some sort of advert condemning other LCC like FY before....

correct me if i am wrong...

 

Anyway...it's all about business! There are time you are on the top, and when you are on the top, don't forget to look down! Rite?

 

I beg your pardon..."Red belongs to us!!" Hello! Remember the unMaHal fares AK lauched not too long ago?? What was that about! AK and TF...one word...GROW UP! (well...two words actually!)

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One conclusion: AK cashflow is very much affected by the MH campaign, and TF is feeling the pain. Hence, that's why he's talking nonsense these last few days. He's gone quite un-cool.

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AK should be strong enough by now to counter/survive any threat from its main competitor. They have been given enough room to grow that far that quick. I personally have confident with AK and TF. I am sure we all are. Credit to them. And credit and not criticism to the Government.

 

Level playing field to be accorded to you AK? Well it should be the other way round in fact.

 

1)Remember.....you could slash the price but MH couldn't. Did MH ever make noise then? Unless I was deaf.

 

2) You requested for more domestic. You had been given routes within Sabah and Sarawak as requested. What happened then??

 

3) You now have access to many foreign destinations. You have more frequencies in many destinations than MH. And you just obtained lucrative Perth and HKG. And you got London already. Well u want Heathrow? Not easy bro unless u buy the slot. And, its against your low op cost philosophy. Virgin could wait for 8 years so why can't you? You have access to all these destinations far quicker than MH did. And you can't blame anyone because lack of widebodies. Singapore? Not easy too but hey, you got it bro! Hurray!! And no worries, slowly slowly u shall get more than twice. How many years it took MH to even get twice at Heathrow?

 

4) Aircraft?? U beat MH flat in all categories of narrow body equipment. And your aircraft look far attractive than those of MH.

 

5) Your fares, no worries, in general, are cheaper than MH. Your holiday packages, MH can't beat your price. Don't complain when others slash prices. Every airline does in this crazy industry, whether they are conventional or lcc. Michael O'Reilly even said that someday, his airline would give free seats due to lucrative advertising revenue.

 

So no worries. Stay cool my dear TF. You have no fat like MH does. Give MH a level playing field. You claim you know the tricks better. And you are far far ahead. So you and AK should survive, even stronger. I am definite and god bless!

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With all the reason given by Azahan here, i dont think AK should be worry with MH. I hope TF should keep his mouth shut... :rolleyes:

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