Comments: AirAsia Ponders Manchester United Shirt Deal

On the sporting front, I see many articles stating that AirAsia ponder Man United deal.

Here's one.

• Leading airline company AirAsia are the latest organisation to have talks with Manchester United over becoming their next shirt sponsors.
  
  The Red Devils need a replacement for embattled US banking giant AIG, who have confirmed they will not be renewing their current contract, which expires next year.
  
  Despite the current global economic downturn, United are still quietly confident of agreeing an increase on the present £19million-a-year they make in total from their deal with AIG.
  
  It was confirmed last month that negotiations had taken place with giant Indian corporation Sahara, while Saudi Telecom are also believed to be in the running.
  
  Now AirAsia chief executive Tony Fernandes has confirmed he will meet United counterpart David Gill about the possibility of becoming only the club's fourth shirt sponsor, following on from Sharp, Vodafone and AIG.
  
  "There is no doubt that this would be great for AirAsia," said Fernandes on his personal blog.
  
  "I don't know what the entire package would amount to but I was just thrilled that we have reached a stage where Manchester United would actually
  
  1) Think that we are a big enough brand to afford them; and 2) That they would want our brand on them."
  
  An Asia-based deal would make sense for United given the scale of their support in the region.
  
  The Red Devils have already announced their plans for a pre-season tour in the summer that will see them visit China, South Korea, Indonesia and Malaysia.
  
  It will be their third tour to the continent in five years, while last weekend they confirmed a tie-up with the city of Seoul to promote both organisations.

Last I recall was that AIG's four year deal cost AIG a cool US$100 million.

Bottom line is can AirAsia afford such a deal?

Last I recall it was just yesterday that I asked "Would You Define AirAsia Debt As A Bubble?" after reading that AirAsia had taken another mega loan worth some USD700 million or some RM2.5 billion.

Last I recall that in AirAsia last reported earnings AirAsia stated it had cash balances of 774 million, total debts of 6.352 billion and a capital commitment of 24.1 billion. Adding that RM2.5 Billion new loans should mean that AirAsia loans would total a mind-boggling 8.872 million.

Well what's wrong with such a godzilla-sized loan? One needs to make money, yes?

And this is the link to AirAsia last reported earnings source of data: Quarterly rpt on consolidated results for the financial period ended 30/9/2008

What's the total quarterly losses? RM465.527 million! Total year-to-date losses totals RM294.834 million.

Truly amazing.

So do you reckon AirAsia should sponsor a Manchester United shirt deal?

Do you think US100million or RM365 million at present time is simply excessive for a company who is clearly not in the best of financial health as AirAsia?

Why can't AirAsia repair its poor balance sheet before pondering on such a massive project? Why can't AirAsia makes its billions of ringgit first and settle at least half of its loans first before thinking of such a massive project?

Do you think I am wrong to be asking such questions?

By the way, on the side note, let me be really frank also. Most knows that I am a Manchester United supporter too and let me say I would dearly, dearly love to have my name printed on Manchester United's shirt.

Yes, I would.

However let me be really frank also. I know I cannot play footie well enough to play for Manchester United and I know I certainly cannot afford such a deal.