Where’s the beef for Malaysia Airlines?

The snakeyest deal ever: Malaysia Airlines-AirAsia 'share swap' deal

They say a picture is worth a thousand words. The grin on Tony “Ular” Fernandes tells a thousand tell. But there’s more to just the grin. If anyone care to look at this picture in almost all dailies in the country this morning, there is one glaring point which a strong message is being sent.

There are three Fernandes’s logos in the backdrop; Tune Air, AirAsia and AirAsia X BUT there is only Malaysia Airlines’s logo, stand alone. The organisers of this signing ceremony do not even have the audacity to include Firefly and MASWings logos on it.

Of course, so many persons also asked why should CIMB’s logo on it as well? “They are just the advisers. They are not stakeholders”.

On behalf of many Malaysians and our readers here in BigDogDotCom, we only have questions. No answers and most of us started the guessing game. So who ever is close enough to Khazanah management and of course the advisers to this ‘share swap’ deal for Prime Minister Dato’ Seri Mohd. Najib Tun Razak, please answer these questions:

1. Where is the beef for Malaysia Airlines in this ‘share swap’ deal?

Seriously, Fernandes and friends get to own 20.5% of Malaysia Airlines, two very strategic seats on the BOD as non-executive and non-independent directors, seats in the Exco which will decide on operations and all decisions involving money and almost help themselves to the entire Malaysia Airlines as they like.

They already wanted to ‘kill’ the growingly popular Firefly, which is Malaysia Airlines’s direct threat to AirAsia.

2. If this is ‘share swap’ deal, why isn’t any of Malaysia Airlines BOD member(s) get to be on AirAsia BOD?

This is something strange. If this is a true ‘share-swap’ deal, then who is representing Malaysia Airlines’s strategic interests in AirAsia. If there is none, how come?

3. How come Khazanah did not appoint anyone who have had relevant airline industry experience as non-executive-independent director in Malaysia Airlines BOD?

There are very experienced former airliners in likes of Tan Sri Bashir Ahmad Abdul Majid who is now MD for Malaysia Airports Bhd., who was an Executive Vice President in Malaysia Airlines not so long ago and persons like these wealth of experience must come very handy for Malaysia Airlines. Unless Khazanah feels that a retired banker or a satelite broadcaster is a more valuable personality to be in.

4. What is the ‘value add’ for Malaysia Airlines in this ‘share swap’ deal?

Malaysia Airlines have bigger international networks across five continents,codeshares and recent membership to One World alliance. That is without considering the fact that MH flies to very sassy destination like London Heathrow, Tokyo Narita and Los Angeles International, which AirAsia don’t. So what is it with AirAsia that Malaysia Airlines would benefit from?

5. What is it in for Malaysia Airlines’s 20,000 employees?

What would these people get from the ‘share swap’ deal and what will become of them. Will they still have a job after Fernandes are done with his ‘butchery’?

6. Who else benefited from this ‘share-swap’ deal?

Last but not least, who are the parties that benefit from this besides Fernandes, his partner Kamaruddin Meranun and the ‘advisory’ fee CIMB?

AirAsia's stock the last six months

Rumour has it that Fernandes ‘threatened’ to move his HQ to Jakarta was calling a bluff. More rumours about some people pushing up AirAsia’s shares from RM 2.40 six months ago to RM 3.60 last week, so that they ‘share swap’ deal could be two-for-one.

Malaysia Airlines

Now compare that to Malaysia Airlines’s six months ago price level. It was almost the same.

From where we are standing, it looks very suspicious. The modus operandi was similar when ECM Libra wanted to ‘eat up’ four times larger Avenue Capital Bhd, ‘The sardine going after the shark’. Well, they were very successful with the authorities backing them up. Santayana said that people who did not learn for their past mistakes are doomed to repeat that again. In this‘share-swap’ deal which was almost like a pirate raid, was inked in a manner probably because the majority of us failed to take note of what had happened in the past.

There is one thing peculiar about Malaysia Airlines, which should be pondered. For all the conspiracy theory pundits; former Chairman Tan Sri Dr Munir Majid was sent in a few months before AirAsia went listen of Bursa Malaysia. Conveniently, he exited a few weeks back. Please do the math.

We would like to quote The Edge’s reporting on what Khazanah Managing Director Tan Sri Azman Mokhtar’s take on the ‘share-swap’ deal:

Azman said the transaction has been pragmatically structured in that the business models, brands, boards, governance structures and cultures will remain distinct and separate, but is now complemented by the comprehensive collaboration frame (CCF) work.

“They (the two airlines) are not combining, but competing in some cases and collaborating in some cases. Can you imagine the power of MAS’ 13 million passengers and AirAsia’s 39 million passengers a year. This is a very powerful combination.

“We don’t have time anymore to look at petty things and differences. It’s time to go forward,” he added.

In addition, Khazanah also proposed to acquire 10% of AirAsia X on terms and at a price to be mutually agreed later. Azman said this would be done “quickly”, adding that its investment in the aviation sector currently accounts for about 3% of its portfolio.

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This 10% acquisition of AirAsia X is outside the ‘share swap’ deal. So the “Thirteen Million Plus Ringgit” question is:

1. How much is the acquisition will burn Khazanah’s coffer?

2. Will CIMB be part of this acquisition advisory?

3. Will this acquisition, if and when it happens, be made known to public?

Malaysia Airlines’s tagline used to be, “Going beyond expectation”. Khazanah really gave Fernandes this tagline to come through. And for PM ‘Flip-Flop’ Tun Abdullah Ahmad Badawi to play this ‘adviser’ role in seeing both parties get to deliver what they are supposed to is a really pathetic joke.

*Updated 2330hrs

- bigdogdotcom