Monday, December 05, 2011

And MAHB Claims That It Was AirAsia That Asked For A Bigger KLIA2

And the drama continues. On the Sunday yesterday: MAHB: AirAsia asked for bigger KLIA2

  • Sunday December 4, 2011
    MAHB: AirAsia asked for bigger KLIA2
    By B.K. Sidhu

    PETALING JAYA: Malaysia Airports Holdings Bhd (MAHB) has fought back to say that it was building a bigger KLIA2 upon the request of its biggest customer, AirAsia.

    It broke its silence after being criticised by AirAsia boss Tan Sri Tony Fernandes for building KLIA2 to cater to 45 million passengers, thus inflating the cost to RM4bil.

    On its website, MAHB posted a document titled Why KLIA2 has to be bigger? which showed that AirAsia had estimated that passenger traffic at the new terminal would hit 28.7 million by 2015, 45.3 million by 2020 and 60.3 million by 2025.
    The figures were more aggressive than MAHB's own projections for the same period, according to a graph included on the website.

    MAHB said the new airport would cost between RM3.6bil and RM3.9bil and that AirAsia had asked for a fully automated baggage handling system from a semi-automated system, which caused the six-month delay in opening the airport.
    KLIA2 will only be ready in April 2013.

    AirAsia chairman Datuk Aziz Bakar said yesterday “we had requested MAHB to start thinking of building a bigger KLIA2 and to expand its capacity to cater to 45 million passengers since there has been a series of delays in the completion of the airport. The initial plan was for the airport to handle 30 million passengers and be completed in 2011”.

    “(Now) if they do not start preparing for more passengers then we will not have the capacity as we anticipate to achieve 30 million passenger growth by 2015/16,” he said.

    On the fully automated baggage system, Aziz said: “We had asked for a semi-automated system but MAHB decided on a fully automated system and we agreed to it.”

    The controversy over the bigger airport has also sparked speculation over Tan Sri Bashir Ahmad's future in MAHB.

    This led the market to speculate that he was supposed to meet Khazanah Nasional Bhd boss Tan Sri Azman Mokhtar yesterday. It could not be ascertained if the meeting took place.

    Khazanah is a major shareholder with 54% stake in MAHB, and when contacted, its spokesman Mohd Asuki Abas said “we do not comment on speculation”.

    On Friday, MAHB chairman Tan Sri Dr Aris Othman said Bashir had the full support of the management and board, quashing rumours the latter would be replaced.
See also: MAHB: AirAsia asked for bigger KLIA2

Me say?

AirAsia wants badly to market itself as a low-cost aircraft. However, to maintain its CHEAP look, it has separated a lot of charges from its ticket prices. When you use your credit card, AirAsia imposes an additional charge. Hello bankers! Aren't your merchants prohibited from making those charges? And then there's that idiotic check-in counter charges, which is the worst charge of the lot. What kind of charge is that?

Yeah, I think AirAsia should take a good look at itself first.


Big Sea said...

We need to give Tony credits for :
1). Make flying cheaper and affordable.
2). Demonstrate to Malaysians how badly managed MAS is.

He is not perfect however :
1). Removing Fire Fly is not an acceptable cooperate governance if fire fly is profitable given that he has vested interested in Air Asia.
2). Getting Air Asia and Mas to sponsor QPR is not acceptable because this is a related party transaction.

On this Airport tax hustle, I will support him because:
a). I seriously believe MAHB need this hike to compensate big KLIA2 cost overrun.

b). Claiming that KLIA2 cost overrun is due to Air Asia request is not acceptable. MAHB do not need to report to Air Asia. This has shown us how irresponsbile MAHB management is.

c). I strongly believe the cost management is poor.

If you are not a MAHB shareholder, give your support to Tony.

limko said...

Air Asia used to be cheap as it claimed, but no longer so especially when it is not during promotional period.

If you were to fly Air Asia on short notice, you will find it is not much cheaper than full service airline when you add in comparable services to arrive at an apple to apple comparison. In fact, it could sometimes costs more.

I think Air Asia has kind of graduated from its initial years of low margin operation to now trying to generate higher revenue and margin from its customers if you are not careful when booking the ticket.

From my personal experience, it is more worthwhile and rewarding to fly full service airline on long haul with early preparation.

richard said...

i am not aa stockholder, nor will i ever be. i detest his aa charging us for using credit cards and also for counter checkins, fying aa now is almost no different from mas. you used to be able to say, now everyone can fly but now with all the charges, unless you haveto go KK or kuching like me, then you all are better off taking the bus! this is snadiwara from tony semata mata.

yhtan said...

Big Sea:

Getting AirAsia and MAS to sponsor QPR is a smart move for marketing, EPL is the most viewed football league in the world. Paying about RM5mil(1mil pound) is peanut for them.

The airport tax hike is not reasonable, i applause Tony to fight with MAHB in public.

Moolah said...

yhtan: Thanks for sharing your view, let me share mine which unfortunately differs.

From a marketing perspective, yes, I would agree with you that there is some justification.

However, the problem for me is the ownershop of QPR.

With Tony owning QPR, from a corporate governance point of view, that sponsorship stinks. Strip out the 'potential' marketing benefit, Tony used TWO public listed companies to sponsor a team which he owns. This equates to vested interest. Tony used the two plc for his own vested interest.

Yes, and then who benefits more from the sponsorship?

QPR the team or AirAsia/MAS?

My answer? QPR the team benefits more.

Moolah said...

Regarding the airport tax.

Is it really fair that a company like MAHB is not able to raise its airport tax for NINE years?

And most important, compare it to other countries, other airports, is the airport tax imposed by MAHB excessive?

Moolah said...

And can anyone tell me if its fair that AirAsia charge for credit card usage?

My answer? I detest any merchants making such practise.

For reference:

Quote: Banks are firm when it comes to merchant surcharge. RHB Bank head of retail banking Renzo Viegas told consumers not to “accept any imposition of surcharge, report such incidents to the bank or go to other merchants that do not impose surcharge.’’

Quote: urces in the retailing industry emphasise that it is the retailers’ responsibility to absorb the surcharge, which ranges from 1.5% to over 2%, depending on the volume of business and negotiations with banks.

In fact, some of the larger retailers are suggesting that a fine should be imposed on those merchants that impose the credit card surcharge.


So why is AirAsia charging for credit card usage?

Moolah said...

And can anyone justify the counter check in charges imposed by AirAsia?

EmmEnHatch said...

Big Sea: AA is simply barking at the wrong tree. Tax regulated by government. For all this while, the government has to fork out taxpayers money to pay the compensation to MAHB. What MAHB done now is to transfer such burden of collective taxpayers to single passenger. I think it is fair enough.

One more thing, u can travel oversea which cost thousands, but u can't pay an increase of tax RM14? So funny la. Ordinary people from kampung, felda or living in city low cost flat earning RM1k/month, they don't have such luxury to travel oversea la.

I'm not impressed with the statement of Tony F saying that high airport tax will stop tourists to come to Malaysia. Our neighboring countries imposed much higher tax, but still people flock to their countries. Tourists don't care bout the tax, as long as they can savoring good tourist spots with good hospitality.

I'm not MAHB or AA direct shareholders, but I know our money with institutions (like EPF, PNB, etc) is used to buy stock of these companies.

Moolah: MAHB drop another bombshell on AA.

Moolah said...

EmmEnHatch: Thanks for the link.

Yes, it's getting rather embarrassing for AA.

Moolah said...

Fernandes' 'powerful' request

Presenna Nambiar Published: 2011/12/06

Malaysia Airports releases two letters written by Tony Fernandes and Bashir Ahmad addressing the issue of the baggage handling system.

MORE than an hour after posting a conciliatory message on its website, Malaysia Airports Holdings Bhd (MAHB) released two letters written by AirAsia Bhd's Tan Sri Tony Fernandes and MAHB's Tan Sri Bashir Ahmad addressing the issue of the baggage handling system (BHS).

In a press statement released to the media late yesterday, in rebuttal to AirAsia press release distributed earlier, MAHB attached a letter written by Fermandes, AirAsia chief executive officer, requesting for the BHS in KLIA2 to be upgraded to a "powerful" fully automated one.

The letter was dated June 16, 2011.

In it, Fernandes wrote that AirAsia would prefer the installation of the most sophisticated fully automated BHS at the new LCCT.

In the letter to Bashir, Fernandes stated that AirAsia recognised that the decision might have certain impact on the current work at the new LCCT.

"We trust Tan Sri (Bashir) will understand and support AirAsia's decision, since it will result in significant benefits to AirAsia, MAHB and the nation as a whole," Fernandes said before signing off.

This letter is at odds with one quoted by AirAsia in its press statement yesterday, which has AirAsia X chairman Tan Sri Rafidah Aziz stating that the decision to implement a fully automated BHS was made unilaterally by MAHB and that the six-month delay to the completion of KLIA2 could not be attributed to AirAsia.

MAHB, however, explained this via a second letter in response to Rafidah's note.

In it, Bashir noted that while AirAsia and MAHB had come to an agreement that AirAsia would be willing to settle for a less sophisticated BHS in the interest of reducing the impact to the timeline and cost of the new LCCT, MAHB had said it would defer to the decision of the MAHB board.

The board later decided on the more sophisticated BHS and this was communicated to AirAsia in a meeting on July 6, 2011.

The statement by MAHB also highlighted that a total of 47 meetings had been held between MAHB and AirAsia since April last year to discuss and address all of AirAsia's requirements.

A workshop with all stakeholders, including AirAsia, was also held in September 2009, where the Needs Statement for KLIA2 was formulated.

"The full agreed minutes of these meetings will better reflect the detailed discussions held between Malaysia Airports and AirAsia on the development of KLIA2," MAHB said.

Other issues raised in AirAsia's press statement were not addressed.

Read more: Fernandes' 'powerful' request

CK said...

Hi Guys,

U all got the wrong pictures.

The BIG picture should be efficiency & transparency in PLC management.

Both MAHB & AA suck big time. The end-users, that's U & me, r paying for their farces.

AA plays to the dislike of the MAHB to garnish for sympathy, while at the same time milking the dis-orientated users via whichever means.

Meanwhile, MAHB has to find some income to patch the financial holes that's getting bigger, through her hp6 management team.

Many voices have been heard. Some pros, some cons, to either parties. But the MAIN theme is why should we need to be following the herd & in doing so paying more.

Isn't there a 3rd alternative, where the payers r the ultimate winners, while the intermediate supporting services get their reasonable cuts?

This is really a country for suckers!!!!!

Big Sea said...

The management team of MAHB needs to be responsible for all the decisions made even if those were requests from Air Asia ! They are hired to plan, think and manage, not to fulfill everything thrown at them by Tony. Everyone has their own priorities and everyone has to be responsible for their own decisions. Whoever in the MAHB management team that thinks AirAsia is causing the cost overrun should be fired.

Big Sea said...

Back to the QPR sponsorship, if Tony were a man of Integrity, he should have reject the deal as the owner of QPR.
No matter who benefits more, this is not acceptable. It would be fine if Mas/AirAsia sign up for sponsorship for Wigan instead.

Moolah said...

aw: yes, this is not an episode that I think we can all be proud of.

Right now, obviously, KLIA2 is sticking out like a sore thumb. The cost increased is staggering.

And for me, MAHB could probably have done better.

Now there's the 'he say she say' blame being said. Who's right and who's to be blame? Would we ever know?

Was MAHB allegation that AA projected those optimistic passengers projections true? Did AA asked for the fully automated baggage system?

Who do we believe?

For me, I would ask why isn't there better communication between both parties?

Why now? Why all this? Having a shouting match in the media is really silly.

And how well has MAHB really manage this KLIA2 project?

And sadly, who will end up hurting more? Us, the consumers.

And surely, there was a better way AA could handle this from day one. Using Facebook and Tweeter as a tool to voice all these issues? Was this the best option?

Now? Everything is stinking front left and center.

And by complaining lot's of focus is finally on AA's hidden charges.

Its credit card usage charge stinks.

And its check-in counter charges is stupid.

And the manner in how AA and MAHB is fighting this issue is getting really embarrassing.

j3ff said...

yes. i hate the credit card charges the most. still dare to name it convienience charge??!?!?!
Is there a way we can get AA to abolish the credit card charges?

Mun Wai said...

this was my first impression: Malaysian corporate leaders are being so cheap by resorting to open quarrel the threatens to strip each other off.

Perhaps all are getting as cheap as AA and the Indie. (For sure this mt be censored la Moo). No point argue until the cows go home.

Trying to do away with counter check-ins by imposing RM10 fee Switching to fee-based sources? checking-in is part of authentication to allow boarding, isn't this too much.

They say, an Indie's lima sen is bigger than their cow cart's wheel :P

Moolah said...

j3ff: I think you should complain to your bank credit card department and imform them that their merchant, AA, is making such a surchage for using your credit card.

Moolah said...

Mun Wai: I really don't censore la.... not unless it's requested. :P

yhtan said...

I agreed with u guys, Air asia isn't cheap as last time, i bought a zero fare to siam reap, beside fuel surcharge, got a new surcharge named as "Passenger Service Fee" for RM45, end up pay about RM100+ for it.

Didi said...

Tony Fernandes sucks!!! Doesn't he charge us blatantly the airport tax.. When u buy aa tix, there's the airport tax on the side. So no matter how much MAHB is imposing tax, he'll transfer them to us.. It doesn't affect him at all.. Stop pretending like he cares about that airport tax! Besides, he's getting all this competitions in the region, MAHB should not listen to his angan2 mat jenin that there's gonna be 45mill passengers and what not.. it's just gonna be too costly to maintain a rather empty airport really!

CK said...


A side track - 'j3ff: I think you should complain to your bank credit card department and imform them that their merchant, AA, is making such a surchage for using your credit card.'

The complaint always ended up like musical chair & then suddenly lost without trace!

BTW, AA is just doing a business norm in bolihland.

Everything paid via creditcard carries a cur-charge. Many don't complaint bcoz it's the only way they can get what the want, using future money.

The card issuing banks,just play dumb, simply the sum of cost + sur-charge does add an additional margin to their overall sur-charge to the merchandisers!

Related case - try paying a tour package using creditcard, all tour operators will impose sur-charges. When complaint to the banks - ta'tau - is the normal answer.

j3ff said...

CK, well then, hope someone organises something and bring this matter out. class-action suit? FB page?
Anyway how can the banks say they dont know? Just show them the receipt! The charges are clearly shown there!