MSWG Also Questions The Need For New LCCT!!

Posted the other day: Does Two LCT Makes Sense? and More On Sime Darby's Labu LCT Project.

Today on Business Times, MSWG also addresses this very same issue! MSWG questions need for new LCCT

• The Minority Shareholder Watchdog Group (MSWG) has questioned the benefits of the new low-cost carrier terminal (LCCT) in Labu, Negri Sembilan, proposed by Sime Darby Bhd and AirAsia Bhd.
  
  "Under the current depressed market conditions and likely difficult times ahead, initiatives led by the private sectors are most welcomed. Nonetheless, all key stakeholders must look at the broader picture to benefit the nation as a whole and the companies specifically," its new chief executive officer Rita Benoy Bushon said in a statement yesterday.
  
  She said while there may be persuasive arguments for Sime Darby and AirAsia to build a new LCCT, the watchdog group believes that an "orderly development and construction of airports and aviation infrastructure in the country must be given the utmost consideration to ensure optimisation of resources in line with the country's National Airport Masterplan".
  
  "(While) it is good to have competition, whether there is room for two LCCTs to be developed is debatable," she added.
  
  Bushon also questioned the funding arrangements and ownership of the proposed LCCT. These are important for shareholders to assess the impact on the companies' gearing and cash flow.
  
  "At MSWG, we believe in the board of directors' duty of making decisions to the best interest of their companies, shareholders and stakeholders.
  
  "We also believe that commercial viability, merits of competition and value-creation should be at the heart of any corporate decision," she added.
  
  MSWG believes that the proposed LCCT will hurt airport operator Malaysia Airports Holdings Bhd as it will cannibalise the existing capacity of KLIA given that AirAsia commands 16 per cent and 49 per cent of the international passenger and domestic passenger movements respectively at the airport.
  
  Last month, the Cabinet gave its consent for Sime Darby and AirAsia to proceed with the proposed LCCT on Sime Darby's 2,800ha in Labu. The two companies are now in preliminary discussions with the state and federal authorities.

Well done Rita!

Take AirAsia involvement posted in the other blog posting: More Capital Borrowing For AirAsia????

Bottom line is AirAsia is already buried way deep in debts but yet it wants to borrow more to involve in the building of the LCCT terminal.

Does it even make sense?

Is this how a business is run?

Is money really that cheap that one can borrow and borrow and borrow??????