The real winners in Air Asia-MAS deal

It looks like the little Napoleons in Khazanah are the ones who will benefit most from the controversial share swap.

ANALYSIS

Who are the real beneficiaries in the controversial Air Asia-Malaysia Airlines share swap? The answer should not be as confusing as has been made out to be in media statements from all and sundry.

Air Asia Chief Tony Fernandes isn’t being very helpful, and for obvious reasons. He fears that millions of his doting fans will abandon him and, in consequence, he will lose his throne as the God of Marketing in Malaysia and the region, if not the world.

We are told that Khazanah Nasional will have a 10% stake in Air Asia in return for the latter having a 20% state in Malaysia Airlines. Khazanah Nasional has a 17.33% stake directly in Malaysia Airlines. Indirectly, it has a 52% stake through Penerbangan Malaysia Sdn Bhd, its wholly-owned subsidiary.

There’s more than meets the eye in this cloak-and-dagger deal.

Tune Air Sdn Bhd, a private limited company which has a 20% controlling stake in Air Asia, is owned 50:50 by Tony and his partner Kamarudin Meranun. This means that each has a 10% stake in Air Asia through Tune Air.

Khazanah, for all practical purposes, did not enter Air Asia directly. But like Tony and Kamarudin, it went in through Tune Air. The 20% that Tune Air has in Air Asia is now owned 50% by Khazanah and 50% by Tony and Kamarudin.

Khazanah, in reality, now owns half of Tune Air. Tony and Kamarudin both hold the rest in equal measure. In return, Tony and Kamarudin accepted a 20% stake collectively in the virtually bankrupt Malaysia Airlines. Many will say that the two need to have their heads examined.

The bottom line is that buddies Tony and Kamarudin have both lost their once controlling stake in Air Asia via Tune Air.

The little Napoleons at Khazanah can go on to pick up Air Asia shares in the open market and build up its ownership of the airline outside Tune Air. The revenue from Air Asia is expected to help feed the war chest of the little Napoleons at Khazanah.

This is part of the real story that Tony isn’t telling anyone. Instead, like Kamarudin, he deliberately keeps mum on the deal while the media goes on a wild goose chase. Both men must have laughed their heads off recently when several MPs attacked Tony in Parliament over the share swap.

It’s a bit of a mystery why Tony and his partner gave up their controlling stake in Air Asia.

Under Tony, Air Asia had bragged from its inception that Now Everyone Can Fly. We can only guess at what his real motives are in accepting a deal with Khazanah so that Not Everyone Can Now Fly.

There was that story not so long ago that Air Asia would shift its headquarters to Jakarta. This was shortly after Tony started singing praises of the Indonesian capital. The Air Asia chief saw Indonesia as El Dorado and the Promised Land all rolled into one as Air Asia Indonesia was poised for as much success as Air Asia in Malaysia.

Genius plan

When caught with his pants down over the headquarters announcement, he quickly claimed that Air Asia would still keep its headquarters in Malaysia. Jakarta, he said, would be Air Asia’s Asean headquarters since that’s where the Asean Secretariat was located.

Apparently, he wanted to have a “closer working relationship” with the Asean Secretariat since Air Asia was in fact THE Asean Airline. If that’s the case, what role would the so-called Air Asia headquarters in Malaysia still play? Air Asia would end up with two headquarters under Tony’s genius plan.

Since the share swap deal, we have not heard anything about Air Asia’s Asean headquarters in Jakarta. Instead, we are told that Tony will set up a new airline—Caterham Jet—ostensibly to compete with, among others, Qantas in its plans for a new airline for the super rich in the region. Not Everyone Should Fly? God alone knows.

Here, the truth of the matter is that Tony has had it up to his eyeballs with the little Napoleons at Malaysian Airports Holdings Berhad (MAHB) for virtually extorting him over the years through excessive fees. He sees the badly-managed MAHB as a leech, sucking Air Asia’s blood for all it is worth.

The way he reckons it, he works hard only to see MAHB robbing him of the fruits of his labour and constantly blackmailing him. He is still sore that it denied him the right to build a new low cost airport near the Kuala Lumpur International Airport. Instead, MAHB decided to build its own—for the lucrative private contracts that the little Napoleons could take for themselves—and confine him to using their new airport.

MAHB even enlisted the support of former prime minister Dr Mahathir Mohamad, the omnipresent, to lobby public opinion against the new airport planned by Air Asia. Many stories in the Malay media on the issue bordered on the personal, were highly offensive and even downright racist.

That Air Asia has been a runaway success in Malaysia from the word “go” is in no doubt whatsoever. It has replicated and duplicated this success through subsidiaries in Thailand, Vietnam and the Philippines, besides Indonesia.

Unique exit strategy

So, again, what’s behind Tony’s fixation with the share swap? Is this an ego trip for him at the expense of the legions of loyal Air Asia commuters?

Is he abandoning Air Asia in Malaysia through his own unique exit strategy a la the share swap deal? That’s the million ringgit question!

Tony should come clean on the deal. Perhaps, he can turn up at the on-going Public Accounts Committee hearings and confess his sins.

And he should stop telling too many stories.

Not too long ago, Tony kept telling the media that Singapore was over-rated as a must-stop transit between Oceania, Europe and the world. He pledged to help build up Senai International Airport to eclipse Singapore’s Changi. But after Air Asia received long-denied landing rights at Changi, we no longer hear about the Senai plan.

Air Asia’s and Tony’s many loyal fans want to ensure that Everyone Can Now Still Fly.

No doubt, they wouldn’t want the little Napoleons at Khazanah, a loser organisation operating in secret most of the time with public funds, to dictate how Air Asia should be run.

It appears that Khazanah’s little Napoleons are not satisfied with making a mess of Malaysia Airlines and that Tony has willingly jumped into their trap for his own reasons, whatever they are. Khazanah’s little Napoleons will soon start controlling the lucrative contracts at Air Asia, as they have done at Malaysia Airlines.