AirAsia seeks 'secession to form own republic'
AirAsia has argued that state-owned Khazanah Nasional Bhd’s consistent attempts to prevent it from moving to KLIA East @ Labu are throttling the ability of Southeast Asia’s biggest discount carrier to innovate.
AirAsia has argued that state-owned Khazanah Nasional Bhd’s consistent attempts to prevent it from moving to KLIA East @ Labu are throttling the ability of Southeast Asia’s biggest discount carrier to innovate.
AirAsia boss Tony Fernandes made the remarks in response to comments by Khazanah managing director Azman Mokhtar on Monday last week.
This will be one of the key messages he will convey to Deputy Prime Minister Najib Razak at a special meeting tomorrow over AirAsia’s proposal to build a new airport in Labu, Negri Sembilan.
Azman had earlier said that he opposed the KLIA East @ Labu plan and stressed the importance of connectivity between national carrier Malaysia Airlines (MAS) and AirAsia.
National investment company Khazanah owns Malaysia Airports Holding Bhd (MAHB), the operator of Kuala Lumpur International Airport (KLIA), as well as MAS, which is AirAsia's main competitor.
AirAsia has over the years been involved in a long-running dispute with MAHB over RM110 million in airport charges.
"How can anyone say Khazanah's objective when they own Malaysia Airlines and MAHB?" asked Fernandes during an interview with Malaysiakini last Thursday at the AirAsia headquarters in the Low Cost Carrier Terminal (LCCT) in Sepang.
"I dare say that if Khazanah was in its present structure when I started AirAsia, we would have been dead."
Finger-pointing continues
Citing an example of Khazanah's monopolistic behaviour, Fernandes said: "Suddenly, everyone's concerned about connectivity. There was none here (in LCCT)... Malaysia Airlines didn't want to work with us. MAHB didn't do anything for us. So we built (long-haul airline) AirAsia X."
AirAsia X, which currently flies to Australia, China and the United Kingdom, was launched in late 2007 and also uses the LCCT at KLIA.
Fernandes also attacked the National Airport Master Plan and the claim that AirAsia had not been consulted when the plan was drafted.
"I disagree on the consultation. There is generally a one-way discussion with MAHB. …Only when we started with KLIA East @ Labu did this national airport master plan suddenly come out," Fernandes said.
According to Chandrasekaran Periappah, under secretary of Transport Ministry's aviation department, the master plan - which is still being drafted - will only be released in six months’ time.
In describing the depth of the conflict between AirAsia and MAHB, Fernandes used the analogy of a country seeking “independence”.
“You treat a country badly, they'll want to break away and secede. After three years with MAHB, now allow us to be a republic of KLIA East."
Fernandes cited cost, efficiency and the ability to respond better to passengers’ needs as the main reasons to leave KLIA.
MAHB blames AirAsia
Countering the claims made by AirAsia, MAHB says that in July 2007, AirAsia was opposed to the construction of a new LCCT and that AirAsia wanted to stay at the current LCCT.
In a statement published on its website, MAHB says that it had told AirAsia “that this was not a good idea, as it (existing LCCT) would not provide room for further growth and would instead create congestion in the operational areas".
Besides claiming that AirAsia was responsible for the congestion at the current LCCT, MAHB also said that AirAsia had refused to allow airside connectivity.
Airside connectivity enables passengers to transfer without having to check out their baggage or go through passport control.
"MAHB had offered to provide airside bussing services for passengers, if AirAsia as the ground-handling agent could provide baggage transfers. Transfers via KLIA's airside would then take less than 10 minutes. AirAsia was unable to accommodate this proposal."
Lastly, MAHB noted that "it has been contended that the higher the cost of building a terminal, or for that matter, an airport, will result in higher charges to airlines operating into that particular airport”.
“This is not the case," said the airport operator.
However MAHB did not explain who would pay for the high cost of building a new airport. According to AirAsia, its proposal for a new LCCT at Labu will be five times cheaper than KLIA.
Fernandez has expressed fears that the high cost in construction will translate in high airport charges for airlines resulting in AirAsia’s inability to slash fares.
Part 1
My 'biggest mistake' was to sponsor Khairy's MyTeam
&A: Blogs getting 'sick and twisted'
Part 2
AirAsia seeks 'secession to form own republic'
Q&A: Fernandez pours out his frustrations
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