Malaysia Airports Holdings Bhd (MAHB), which manages the country's airports, will suffer from the recent share swap deal between budget airline AirAsia and national carrier Malaysia Airlines (MAS), PKR's strategy director Mohd Rafizi Ramli says.
Rafizi (left) said there has been a lot of bad blood between MAHB and AirAsia over the years, with neither side wanting to concede its position in a long-standing feud over airport taxes and charges.
The airport operator claims the no-frills airline still owes it more than RM100 million in unpaid taxes, while AirAsia maintains that MAHB charges exorbitant rates for the use of below-par facilities at the low-cost carrier terminal in Sepang.
The dynamics of the volatile relationship between the two entities are expected to change in favour of AirAsia as the share swap effectively lands one very powerful client on MAHB, Rafizi said.
Rafizi implied that with the share swap, AirAsia and MAS will operate as one large conglomerate in control of Malaysia's domestic airspace, giving AirAsia powerful leverage to "arm-twist" MAHB into going along with its demands.
"Now, when AirAsia becomes the single domestic player, MAHB will have only one customer. AirAsia will have (every) advantage to compel MAHB into unfavourable deals.
"Therefore, consumers and MAHB will bear the brunt of the impacts of AirAsia's emergence as the dominant domestic airline," he told a press conference at the PKR headquarters in Petaling Jaya yesterday (TUESDAY).
Swap not necessary
Rafizi said only good things have been said about the collaborationbetween the two airlines, but there has been little mention of the glaring conflict of interests that the once-bitter rivals now share.
Under the share swap deal, AirAsia will take a 20.5 percent stake in MAS, which in turn will take a 10 percent share in the budget carrier. Both companies will also have two non-executive seats on each other's board of directors, giving them a direct say in managerial decisions.
"The often touted benefit of the collaboration is the withdrawal of MAS from the domestic market, leaving it to AirAsia, on the pretext that the former can focus on (the) premium market.
"Ironically, this decision could have been done independently by the MAS and (MAS majority shareholder) Khazanah (Nasional Bhd) leadership, without bringing AirAsia into the picture.
"The participation of AirAsia in the business decision-making of MAS signifies a great conflict of interests that would alarm analysts anywhere."
Najib's economic plans falling apart
Rafizi stressed that as a flagship government-linked company, MAS could not afford to repeatedly go through a shake-up at taxpayers' expense and without any positive results.
He said Khazanah's "tacit admission" of failure in two business turnaround plans (BTP), run by two chief executive officers since 2006, was a possible indicator that the government's GLC transformation programme was likewise failing.
Rafizi claimed that GLCs have long been abused by the BN in creating a nexus of political-business cartels, and accused Prime Minister Najib Abdul Razak of using GLCs to channel public funds into massive projects without any accountability.
"Thus, the well-being of the GLCs is crucial for the economy and the failure of the two BTPs should be viewed in this context.
"Since the government is so keen to showcase its KPI (key performance index) to the rakyat, surely the latest goings-on in MAS are the clearest sign that Najib Razak's much touted economic transformation has also failed," he added.
Rafizi (left) said there has been a lot of bad blood between MAHB and AirAsia over the years, with neither side wanting to concede its position in a long-standing feud over airport taxes and charges.
The airport operator claims the no-frills airline still owes it more than RM100 million in unpaid taxes, while AirAsia maintains that MAHB charges exorbitant rates for the use of below-par facilities at the low-cost carrier terminal in Sepang.
The dynamics of the volatile relationship between the two entities are expected to change in favour of AirAsia as the share swap effectively lands one very powerful client on MAHB, Rafizi said.
Rafizi implied that with the share swap, AirAsia and MAS will operate as one large conglomerate in control of Malaysia's domestic airspace, giving AirAsia powerful leverage to "arm-twist" MAHB into going along with its demands.
"Now, when AirAsia becomes the single domestic player, MAHB will have only one customer. AirAsia will have (every) advantage to compel MAHB into unfavourable deals.
"Therefore, consumers and MAHB will bear the brunt of the impacts of AirAsia's emergence as the dominant domestic airline," he told a press conference at the PKR headquarters in Petaling Jaya yesterday (TUESDAY).
Swap not necessary
Rafizi said only good things have been said about the collaborationbetween the two airlines, but there has been little mention of the glaring conflict of interests that the once-bitter rivals now share.
Under the share swap deal, AirAsia will take a 20.5 percent stake in MAS, which in turn will take a 10 percent share in the budget carrier. Both companies will also have two non-executive seats on each other's board of directors, giving them a direct say in managerial decisions.
"The often touted benefit of the collaboration is the withdrawal of MAS from the domestic market, leaving it to AirAsia, on the pretext that the former can focus on (the) premium market.
"Ironically, this decision could have been done independently by the MAS and (MAS majority shareholder) Khazanah (Nasional Bhd) leadership, without bringing AirAsia into the picture.
"The participation of AirAsia in the business decision-making of MAS signifies a great conflict of interests that would alarm analysts anywhere."
Najib's economic plans falling apart
Rafizi stressed that as a flagship government-linked company, MAS could not afford to repeatedly go through a shake-up at taxpayers' expense and without any positive results.
He said Khazanah's "tacit admission" of failure in two business turnaround plans (BTP), run by two chief executive officers since 2006, was a possible indicator that the government's GLC transformation programme was likewise failing.
Rafizi claimed that GLCs have long been abused by the BN in creating a nexus of political-business cartels, and accused Prime Minister Najib Abdul Razak of using GLCs to channel public funds into massive projects without any accountability.
"Thus, the well-being of the GLCs is crucial for the economy and the failure of the two BTPs should be viewed in this context.
"Since the government is so keen to showcase its KPI (key performance index) to the rakyat, surely the latest goings-on in MAS are the clearest sign that Najib Razak's much touted economic transformation has also failed," he added.
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