AirAsia too good to last for Sabah, Sarawak

Commuters in Sabah and Sarawak will pay a heavy price if AirAsia is forced out of the market.

COMMENT

Sabahans and Sarawakians are increasingly convinced that AirAsia was too good a story to last for them after their being held to ransom by Malaysia Airlines (MAS) since 1963.

They fear that MAS, in cahoots with Malaysian Airports Bhd (MAB), will use their political connections to do a number on AirAsia in their two states and to their detriment. All the signs are there given declining profits at MAS.

Consider the fact that the National Cabotage Policy (NCP) continues to keep prices in Sabah and Sarawak at a much higher level than in Peninsular Malaysia despite constant calls for its abolishment.

A little container of Olive Grove olive oil spread, for example, costs just RM4.50 at the TMC Mini Market in Kuala Lumpur’s Bangsar area. The same product retails at a price three times as much at a supermarket in Kota Kinabalu and six times over at an outlet for expatriates and well-heeled foreigners.

At the same time, wages in both states are very much lower than in the rest of the country. The NCP has also been responsible for holding back the economic development and industrialisation of Sabah and Sarawak. Not surprisingly, the World Bank listed the two states last year as the poorest and second poorest states in the country.

If the federal government is not willing to budge on the NCP, despite the poverty figures and under-development, it’s unlikely to budge on AirAsia in favour of the long-suffering air commuters in Sabah and Sarawak.

Already, the warning signs have come with the refusal of AirAsia to move from its present no-frills location at Terminal 2 to the newly-upgraded Terminal 1 of the Kota Kinabalu International Airport (KKIA) . The move, if it takes place at all by the June 1 deadline, will entail a doubling in passenger service costs alone for the airline from the current RM25 to RM51.

Besides, Air Asia has warned that forcing it to move to Terminal 1 will see a drop in Sabah’s present tourist arrivals by some one million and further deprive the state of over two million new tourists.

Intense lobbying

Earlier, AirAsia was forced to abort its direct China-to-Sibu flights in the face of intense lobbying by MAS. The airline has also suspended or cancelled direct flights between Kota Kinabalu and Labuan, Bandar Seri Begawan, Bangkok and Jakarta.

The national flag carrier is also preventing the budget carrier, Southeast Asia’s largest, from flying to Sydney and New York. The last is a city that MAS abandoned after many fruitless years. Nevertheless, it continues to pursue its “dog in the manger” approach in matters which involve AirAsia.

In fact, Sabah and Sarawak were one of the reasons why Tony Fernandes was emboldened to venture on AirAsia. Fernandes realised, upon his return from London after a stint with Richard Branson’s Virgin Airlines, that MAS was “charging passengers a month’s salary to fly them from one part of Malaysia to another”. He decided that this could not be allowed to go on and came up with his famous tagline, “Now everyone can fly”. The rest is history.

In between Malaysia and the advent of AirAsia, MAS indirectly or directly forced the closure of Borneo Airways and Seaga Airlines in Sarawak. It has also prevented Hornbill Skyways Sarawak and Sabah Air from taking off in any big way in the region. The latter two have been forced to confining themselves to heli logging, flying doctor services, air ambulance, providing air services support for state government officials and politicians and the like. They can’t get even a slice of the annual haj traffic to Mecca, at least from Sabah and Sarawak, and the umrah flights.

Moving forward, AirAsia sees a bleak picture emerging in Sabah and Sarawak for itself. As further insurance, it has decided to initiate the formation of AirAsia Philippines (AAP). AAP, along with other AirAsia subsidiaries in Southeast Asia, will play a crucial role in protecting the company from politicians in Putrajaya who have long cast covetous eyes on it. AAP, in that sense, will join AirAsia Indonesia and AirAsia Thailand. There are also plans for AirAsia Vietnam, AirAsia China and AirAsia India to deter the itchy fingers in Putrajaya.

The emergence of various AirAsia subsidiaries will ensure that the mother company in Malaysia will be better cushioned against various setbacks created for it, from time to time, by politicians in Putrajaya.

No transparency

All this may mean that AirAsia lives to fight another day. But they mean nothing by way of assurances for the air commuters in Sabah and Sarawak.

As it stands, air ticket costs are expected to go up in Sabah and Sarawak if the government continues to knock AirAsia in Sabah and Sarawak. This will take a toll on students and their parents, the business community and tourists.

KK-Labuan-KK, for example, used to be RM50 or less return when AirAsia was serving the sector. Now, with the exit of the airline from this sector, the airfare for the 25-minute flight is RM300 or more whether from MAS or its subsidiary MasWings.

With the politicians having a hand in MAS, there’s anything but transparency in the award of contracts by the national flag-carrier. Many still recall the disclosure in Parliament not so long ago that a nasi lemak on board MAS, incorporated in the ticket price, was RM150 per serving. The resultant public hue-and-cry brought the price down to RM75 but this is still very steep even by the best international five-star chain hotel standards.

If MAS is to be brought to heel, AirAsia has to remain relevant in Malaysia, especially in Sabah and Sarawak. There is no way out from these two states except by air. - FMT