Regional Round-Up
Fernandes hits out at government backing of MAS
March 1st 2014
AirAsia’s Tony Fernandes (pictured) has accused Malaysia Airlines (MAS) of wasting taxpayers’ money after Malaysia’s flag carrier announced losses of 1.17 billion ringgit (US$355 million) for the 12 months to December 31, last year. Read More » On Twitter, the founder of the region’s first low-cost carrier, AirAsia, and the head of the regional AirAsia Group, said: “AirAsia Allstars, take a bow. Malaysia Airlines just lost over a billion. So much money wasted. If people were more efficient Malaysians would spend less on travel. I wonder if it is fair that Malaysia Airlines can lose so much money and protect its market share. Can only do that with taxpayers’ money,” Fernandes tweeted a day after MAS announced its annual results in February.
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No doubt Fernandes was stung by the news that his low-cost carrier, AirAsia reported a 19% drop in fourth quarter profit as competition across the regional multiplied, coupled with a decline in the local currency, higher maintenance costs for its large fleet and forced discounting of fares that drove down yields. AirAsia said net fell from 789.6 million ringgit in 2012 to 364 million ringgit in 2013.
At partner carrier, AirAsia X, the long-haul budget operator, said a 176.2 million foreign exchange loss, stubbornly high fuel prices and a 19.3% jump in operating costs, resulted in a net loss of 86.9 million ringgit (US$24.5 million) at the airline in fiscal 2013. The result reversed a profit of 33.9 million ringgit in 2012. AirAsia X CEO, Azran Osman-Rani, said: “Despite challenging market conditions, we seized the opportunity to invest in substantial capacity to strengthen our market position in our core markets to ensure we remain the world’s largest long-haul LCC operator. We believe the short-term earnings pressure arising from newly introduced capacity will be worth the long range strategic value as yields rise with the maturing of this new capacity.”
