SCwatch

P-water to be served?

The much reported hype and counter hype over the infamous KLIA  East @ Labu over the past few weeks is unlikely to abate, at least not until March 2009.

This is only expected in the Malaysian context where most things are said and done in a very indirect manner. That is one reason why one must be able to pick up the nuances and innuendoes in what has been said or done in order to comprehend and decipher the underlying message that is being transmitted.

It is therefore commendable that YB Wee Choo Keong (here) and Rocky (here) have raised awareness and therefore questions for the government to answer about the building of KLIA East @ Labu. Where is Malaysiakini?

Casting aside all the controversies emanating from this issue, there is one serious matter that has not been really focused on. It is the fact that Air Asia is currently NOT a financially viable concern. In layman’s terms, it is not generating enough cash to pay for its expenses. This is especially so in respect of its borrowings for planes bought to date. Makes you wonder then how they are going to pay for those planes that are to be delivered soon!

This actually explains why Air Asia keeps talking about the future only …… more planes, more passengers, cheaper fares, greater profitability ….. and this is masked by moves like privatisations, new terminal, inefficiency of other agencies etc etc.

Financial commentators worth their salt have already questioned the financial standing of Air Asia and this explains why objective foreigners and locals alike have shunned Air Asia’s shares.

It is not that the company, Air Asia, is bad or rotten to the core! They have just lost focus ….. but if not checked, it will bring the company, Air Asia, down  the abyss!

If Air Asia is allowed to keep changing their “Tune” in mid-air, they will come crashing down into a house full of “P-water”!

Can we rely on the accounts of Air Asia? According to objective analysts, NO.

But their auditor is PriceWaterhouseCoopers. So what? So did “Satyam Computers” (read here), one of India’s largest IT outsourcing company which is listed not only in India, but also New York and Amsterdam. It was recently revealed that Satyam’s accounts have been “specially cooked-up” over the years to the tune of US$1.0 billion!

Air Asia is living from hand to mouth …… paying the salaries and day to day expenses from the advances made by passengers for flights booked.

To prevent such an embarrassing “financial collapse” scenario from crystallizing, the Government should start to act to “save” Air Asia. Letting it fail is really not an option as this is really a personality/management issue. In addition, Malaysia does not want to be a long term laughing stock of the international community over a matter that can be managed objectively!

NATIONALISE AIR ASIA FOR RM1.00

or

MAS & EPF TO TAKE OVER AIR ASIA FOR RM1.00

and

CALL OFF THE PROJECT: KLIA EAST @ LABU