MAS–AirAsia swap was a mistake: Najib as Khazanah chief must take responsibility

The Pakatan Rakyat Manifesto/ Policy Committee thinks that the share swap deal between Malaysian Airline System (MAS) and AirAsia was a mistake and Najib as the chairman of Khazanah should be responsible for this mess.

From the onset, the justification of this collaboration is suspect. If the intention is for MAS to focus on premier services while AirAsia on no-frills services, no exchange of equity is needed.

Since the collaboration took place, a lot of aggressive route and capacity cuts have been undertaken, mostly involving MAS. Furthermore, it has killed Firefly’s (MAS’ low cost carrier) lucrative budget services that were giving AirAsia a run for its money.

Clearly, this is a form anti-competitive behaviour displayed by MAS-AirAsia. Having AirAsia's chief executive, Tony Fernandes, and his deputy Kamarudin Meranun on the board of MAS only serves the interest of AirAsia at the expense of consumers.

Additionally, The Edge has also reported that the share swap deal faced resistance from the Malaysian Airlines System Employees Union (MASEU). It is understood that MASEU’s representative had met with Prime Minister Datuk Seri Najib Razak to air the union’s unhappiness.

No bailouts and advisory fees paid must be clawed back

Unfortunately, all this confirmed the predictions made by independent, not-for-profit research institute REFSA (Research for Social Advancement) on 12 Aug 2011, soon after the swap was announced. REFSA said that this collaboration would result in less frequent flights, reduced job prospects for airline staff and fewer opportunities for all Malaysians due to less connectivity.

Speculations are now abounding on the possibility of the Prime Minister asking Khazanah to buy back the stake exchanged with Tune Air.

In light of this development, we hope that Khazanah will not be bailing out Tune Air.  Considering the fact that MAS reported RM2.52 billion net loss for 2011, its largest loss in history, Khazanah must buy back the stake at a lower price to reflect MAS’ terrible performance since the deal was made.

At the same time, advisory fees paid to the GLC that advised on the deal - CIMB Bank - should be clawed back since the deal was obviously flawed. In less than 6 months after the deal MAS reported this massive loss.

Pakatan Rakyat Manifesto/ Policy Committee

Rafizi Ramli

Dr. Dzulkifli Ahmad

Liew Chin Tong