AirAsia’s Fernandes Caterham Jet Acquired Berjaya Air

[michgyver 0]

AirAsia chief Tan Sri Tony Fernandes will set up a new premium regional airline that will compete head-on with Qantas’ upcoming RedQ full-service carrier, the Sun newspaper reported this morning quoting unnamed sources.

 

The report said Fernandes’ new full-service-carrier will likely be called Caterham Jet and has yet to be granted an operating licence by the Malaysian government although it has secured Bombardier CRJ aircraft.

 

The report quoted a source as saying that the airline will propose to the government that it operates from the Subang airport and is targeted to start operations in May 2012.

 

“Some of the proposed routes include Bangkok, Jakarta and Singapore,” said the unnamed source.

 

Fernandes, who is team principal of Formula One racing outfit Team Lotus, in April purchased British sportscar manufacturer Caterham Cars.

 

AirAsia and Fernandes were not immediately available for comment.

[Wilson Kook 0]

Funny guy..

 

He's the one who told us that premium airlines should stick to premium services and LCCs stick to providing low cost services.

All bull**** lol.

 

[Mohd Suhaimi Fariz 2]

WTF? He said FY should not compete with AK but he's going to set up a premium airline when he knows MH is going to be positioned in the premium market?

 

Now we can see that the CCF is utter nonsense!

[Wilson Kook 0]

Add value to MH my

 

"That man" can claim (if he does) all he wants that the new airline will target a totally different market / complement MH. As if MH's premium product is not good enough. What complement you want some more!?

He's a parasite. A little greedy, and cunning, in my opinion.

 

Hope I'm wrong about him. Have looked up to him after what he's done with the Air Asia brand.

Edited November 9, 2011 by Wilson Kook

[Mike P 0]

Any link for this? I thought it's supposed to be MH to launch the short haul premium airlines.

[michgyver 0]

and he proud to say AirAsia has always serve the underserved cities but he gave Melaka and Ipoh a miss...

 

talk is easy..TSTF

[Nik H. 3]

Brilliant. MH should have done this long ago, but not innovative enough. With spare B734 in hand, all fully depreciated and amortised, it would not take much money to reconfigure and do this to complement mainstream services. CRJ, probably with only 20 - 30 luxury type seats for business travellers on-the-go. Quick check-in/check-out, SZB close to city centre. Gotta hand it to TF for being able to maneuver his way around mediocre uninnovative thinking competitors. hahaha......sit back with a popcorn and watch.....

[KK Lee 5]

The report quoted a source as saying that the airline will propose to the government that it operates from the Subang airport and is targeted to start operations in May 2012.

 

“Some of the proposed routes include Bangkok, Jakarta and Singapore,” said the unnamed source.

 

More choice, more competition, better for travellers

 

[Ganesh.r 0]

Another premium airline out of Subang, great idea!! Don’t have to travel another 50+ km to Klia. Save time and money.

Offer reasonable price for flight around SEA, I'm all yours.

MH and FY can always buy me back with irresistible ticket price. So please go ahead and compete.

 

TF: Salute to you for having the b ls to stir around... keep it coming man !!.

[jani 0]

Great idea.. But why not just use the MAS brand.... Sad la Tony....

[flee 5]

Great idea.. But why not just use the MAS brand.... Sad la Tony....

MH brand stinks because there are so many chains around its neck. See how the MH advocates/supporters and unions strangled the Sapphire proposal? They regard it as a union busting move. Perhaps this alternative premium regional airline is one way to get around the objections to Sapphire.

 

Yes, another round of sandiwara for us to witness!

 

He was in London and Tokyo making presentations to investors the past few days.

 

Reuters report

[jani 0]

But isn't the reason him being given shares in MAS was to enhance its brand? So apa guna? Very frustrating. He was always on about "AK is low-cost, MH is premium".. Ha then now what? Unbelievable.

[Christopher Lim 0]

Yesss!!!! I was so right!!!! Tony is the Trojan Horse to bring down the rotten structure that is MAS! GOGOGOGOGOGOGO!!!!!!!!

[flee 5]

We are outsiders - so we will never be able to get the full story.

 

But judging from the tremendous resistance from the unions as well as the MP for Wangsa Maju, it is probably why they decided to start something new, free from incumberances and historical baggage and let MH sort itself out. If the politicians and union want to keep MH the way it is, then it is fine - so long as it is not making losses.

 

As a country, Malaysia needs to respond to the worldwide competition. Qantas and Singapore Airlines are threatening Malaysian aviation with new competitors, both at the budget and premium end. If MH is not able to compete because it is slow and encumbered by politics and unions, then someone else will need to take up the challenge. We have to look at the big picture and not just at MH or AirAsia.

 

Finally, don't forget the Middle Eastern competition... They will kill MH if the new management does not play it right! The real enemies are all outside Malaysia, not AirAsia!

[filipeseda 0]

If you read it carefully, it's utilising Bombardier CRJ aircraft. This suggests that it is probably super 'atas', small volume sort to say, beyond the league of MH. Furthermore, it is operating out of Subang, which again points to its role as such. Perhaps more of an alternative to private jet travel.

[jani 0]

Yes, the model is not entirely new. Off the top of my head, Delta and British Airways have a somewhat similiar concept. My main point is that he could have easily used MH as a brand for this project.

[flee 5]

If you read it carefully, it's utilising Bombardier CRJ aircraft. This suggests that it is probably super 'atas', small volume sort to say, beyond the league of MH. Furthermore, it is operating out of Subang, which again points to its role as such. Perhaps more of an alternative to private jet travel.

Yes, in the UK/EU they have "time share" type of sharing private jets. You can book the plane to take you wherever you want but you do not own the plane. The capital, operations and maintenance costs are taken care of by the airline.

 

So his new venture may be offering something bigger than a private jet and smaller than a normal jetliner. So its business model should also be somewhere in between.

[Mohd Azizul Ramli 2]

I clearly remember Uncle Tony's single line Facebook status/Tweet about Bombardier CRJ aircraft a couple of months back, now the 2 dots are connected.

 

I am also in the opinion that this new airline is targeting the 'super atas' market which is beyond MH's league.

 

Anything especially if it comes from a private initiative that will give more choices and competitions, should be supported by us mortal consumers.

[filipeseda 0]

Yes, in the UK/EU they have "time share" type of sharing private jets. You can book the plane to take you wherever you want but you do not own the plane. The capital, operations and maintenance costs are taken care of by the airline.

 

 

I understand, but I think it'll be towards being more of a boutique airline, like Silverjet or Openskies, but perhaps slighter more premium than that.

[reezal 0]

This is getting interesting with this news about Subang's Terminal 2 to be redeveloped. Probably, it would the base for this new premium airline.

 

 

 

 

A new super-premium airline in the works

Posted on 9 November 2011 - 12:23am

KANG SIEW LI

sunbiz@thesundaily.com

 

PETALING JAYA (Nov 9, 2011): AirAsia chief Tan Sri Tony Fernandes, who already has interest in four airlines, is set to expand his empire further as he moves to start a new super-premium full-service carrier (FSC) that will compete head-on with Qantas' upcoming Asia-based super-premium FSC called RedQ, aviation sources said.

 

Likely to be called Caterham Jet, sources said the new regional airline has yet to be granted an operating licence by the government, but has secured several Bombardier CRJs which have been sent for retrofitting.

 

Incidentally, it is believed that Fernandes' Formula 1 Team Lotus will change its name to Caterham next year.

 

"Plans are for the proposed airline to operate out of Subang and commence operations in May next year. Some of the proposed routes include Bangkok, Jakarta and Singapore," a source said.

 

Besides AirAsia, Fernandes now has stakes in AirAsia X, Malaysia Airlines (MAS) and its unit Firefly. He became a substantial shareholder in the national carrier following the recent MAS-AirAsia share-swap deal.

 

Talk of the new airline operating out of Subang has been further strengthened on keen interest by MAS and Firefly to redevelop Terminal 2 of the Sultan Abdul Aziz Shah Airport in Subang.

 

Sources said Malaysia Airports Holdings Bhd (MAHB) is expected to award the concession to redevelop Terminal 2 soon.

 

Subang SkyPark Sdn Bhd is believed to be the frontrunner for the job, as it is already managing the Skypark Terminal (formerly Terminal 3) next door before the emergence of MAS as a strong contender for the redevelopment works.

 

To recap, SunBiz reported in April that Subang Skypark was in talks with MAHB to redevelop Terminal 2, which has been vacant since November 2009 after the airport operator relocated its corporate headquarters to Sepang.

 

It is understood that Subang Skypark has since submitted its proposal for the redevelopment of the terminal to MAHB and is awaiting a decision from the airport operator on the matter.

 

According to sources, Firefly, which currently operates its turboprop aircraft out of Skypark Terminal, had also earlier expressed its interest to redevelop Terminal 2. However, its proposal is unlikely to see the light of day following the MAS-AirAsia partnership.

 

An industry source said there has been serious lobbying lately from MAS, under its new management team and deputy CEO Mohammed Rashdan Yusof, to redevelop and take over Terminal 2.

 

"It is unclear whether the lobbying from MAS is to get the national airline to manage and operate its subsidiary, Firefly, out of Terminal 2 or to allow the proposed new airline that is coming up under Fernandes' stable of companies, to operate from there," said a source.

 

Firefly and Berjaya Air are currently the only two airlines operating out of SkyPark Terminal, using the ATR 72-500s and DeHavilland Dash 7.

 

However, observers pointed out that the new airline will further depress the local air travel industry at the expense of the people.

 

Already, they said, the recent MAS-AirAsia tie-up could have resulted in a monopoly, with MAS and Firefly being pushed to focus solely on premium air travel, while AirAsia dominates the low-cost market.

 

"With another new airline by Fernandes, he would be holding shares of five local airlines — AirAsia, AirAsia X, MAS, Firefly and the proposed Caterham Jet.

 

"How would that hold up when the Competition Act 2010 is enforced on Jan 1?" an observer asked.

 

The observer added that AirAsia fares to most domestic destinations have gone up despite assurance by Fernandes that the low-cost carrier's fares will not rise after the MAS-AirAsia tie-up.

[S M Tang 0]

Love him or loathe him, you gotta admire this guy's aggressive business strategies. But do you guys think there's market for this type of air travel in M'sia?

[flee 5]

Don't be surprised if he is going to pitch it to the F1 community too. Caterham Jet may be available for charter when F1 teams are jetting in Asia Pacific!

 

Yes, I do think there is a market. Afterall, there are not going to be many seats to fill in each plane. Perhaps 30-40.

 

CRJ info: http://www2.bombardier.com/Used_Aircraft/en/CRJ_Specifications.jsp

Edited November 9, 2011 by flee

[Mike P 0]

It's a premium airlines means it requires premium service not only on board, but also on the ground. So can the Government allocate another budget to upgrade SBZ? While existing KUL is already under utilised? Oh well...

[flee 5]

My main point is that he could have easily used MH as a brand for this project.

A huge proportion of MH staff and their associated unions really hate TF. Would it be wise to trust them to do a good job for the super premium airline?

 

It's a premium airlines means it requires premium service not only on board, but also on the ground. So can the Government allocate another budget to upgrade SBZ? While existing KUL is already under utilised? Oh well...

Yes, AirAsia was royally screwed when MAHB delayed the permanent LCCT. If they want to control the whole user experience, they should do what Apple did - end to end integration.

 

From limousine pickup of the guests to airport terminal checkin and boarding - they have to run everything themselves. Having your own private terminal is nothing new in aviation. Terminal 2 in SZB is small enough for this kind of airline. They should also bid to redevelop it as their private terminal.

[Abdul Qayyum 0]

Breach of CCF??

 

KEADILAN refers to a Reuter’s report on Dato’ Seri Tony Fernandes’s move to set up a full premium airline to compete on regional routes. The report quotes that the new airline called Caterham Jet shall operate from Subang to service the Bangkok, Jakarta and Singapore routes (among others).

 

With this latest development, the relevance and usefulness of the much criticised Comprehensive Collaboration Framework (CCF) signed between MAS and AirAsia becomes more questionable. The cornerstone of the CCF is MAS and AirAsia’s commitment to stay in their niche markets (full premium service and no-frills respectively) in order not to commercially weaken each other by avoiding a direct competition.

 

I therefore question whether the latest move by Dato’ Seri Tony Fernandes to set up a full premium airline is in breach of the CCF he signed on behalf of Air Asia?

 

The following questions with regards to the CCF should be clarified immediately by Dato’ Seri Tony Fernandes and Khazanah Berhad:

 

Does the CCF prohibit Air Asia or its owner (Dato’ Seri Tony Fernandes) to operate a full premium airline that serves the same route as MAS; in order to leverage Air Asia and MAS’ strength in the no-frills and full premium markets respectively;

Does Caterham Jet serve the same routes as MAS and therefore becomes the latter’s direct competitor, thus obliterating the usefulness of the CCF?

 

The CCF has caused much discomfort to the staff of MAS who feel they were left out in the decision making process in spite of the staunch support given to the various Business Transformation Programs previously rolled out by the management.

 

The setting up of Caterham Jet confirms our argument that the CCF does not guarantee a mutually beneficial commercial arrangement between MAS and Air Asia’s owners that eventually will short-change the public due to the cartel created between the two.

 

MOHD RAFIZI RAMLI

 

DIRECTOR OF STRATEGY

 

9 NOVEMBER 2011