Addendum
Firm no from Fernandes to Malaysia Airlines rescue
April 1st 2019
Finding a buyer for a debt-ridden, unprofitable airline is not easy these days, but Malaysia’s prime minister, Mahathir Mohamad, told media last month there had been interest from some local and foreign companies in taking the plunge of investing in the flag carrier, Malaysia Airlines. Read More »
For many in the industry the prime minister’s comments immediately brought to mind Tony Fernandes and the AirAsia group. That is wishful thinking it turns out. In comments at the annual Credit Suisse Asia Investment conference in Hong Kong last month, the AirAsia group co-founder told the South China Morning Post that generally he did not believe in acquisition because it came with a lot of inherent issues. At the time he was answering a question about an AirAsia investment in HK Express (HKE), but he then extrapolated his position.
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“My philosophy has been organic growth. When you import through acquisition, it comes as a risk so it is not preference.”
“Many people will say [Air Asia’s] expertise could be used to hurt Malaysia Airlines and benefit AirAsia. There is a genuine interest to help but in this day and age, not everyone will see it that way. It’s best we do our own thing. We have a lot on our plate.”
Macau however, and the Greater Bay area of southern China, does interest Fernandes. “Entering China could be via Macau,” he said. “We do not have to be in Mainland China, but being in Macau is like being in China. If the chance came up to be based in Macau it would be another way in.”
AirAsia is the second commercial airline operator into Macau after Air Macau. It is setting up a ground handling unit at the airport and intends to start selling seats on public transport to bring in customers from the Greater Bay Area of China’s southern coastline, a government backed development zone with a 60 million plus population.
Three weeks ago, Malaysia’s Mahathir revealed he was considering whether to shut, sell or refinance MAS and said a decision would be made “soon”. “There are certain parties who are interested to buy (the airline), so we don’t reject [the possibility of selling]),” he said.
The government has been considering the options of changing the airline’s management, downsizing the carrier or expanding it. “Although we hired foreign management, MAS (the carrier’s former acronym) still faced losses. Therefore, one of the options is to sell. I love MAS. I want MAS to be a national airline, but it looks like we cannot afford it,” said Mahathir.
