SCwatch


Air Asia – not “SO CHEAP” after all
November 7, 2008, 12:14 am
Filed under: Airlines | Tags: , , , ,

Unable to compete with MAS?

 

For the first time, Air Asia’s Tony Fernandes has not been able to positively respond to MAS’ fare prices and it’s telling.

Look at recent advertisements by MAS especially on the fares offered and they are all lower than Air Asia’s. Not only that, passengers get to enjoy the relative comforts of the main KLIA Terminal instead of the congested LCCT!

MAS fares are more competitive

The honey-moon is definitely over for Tony with the downturn in virtually everything (as far as he is concerned). His political backers, competition from MAS and low cost carriers, change of tune in mid-air for Tune Money, problems in servicing the increasing debt in Air Asia (don’t get fooled by Air Asia X) and the inability to get the right backers to help him privatise Air Asia.

There is no doubt he initially did wonders by taking Air Asia off DRB-Hicom for a song. It couldn’t go any worse at that point and with it he turned a staid airline into a wonderfully profitable business model ….then!

Then the greed and ego got into the way, the result of which is that he is blaming everyone (sounds familiar) for his troubles …..

In the meantime, notice the adverts coming out from Air Asia do not highlight its fares now? Instead it is the award that they have received…..

FLY WITH THE MOST AWARDED AIRLINE IN ASIA

Eh, Tony, in this day and age of frugality, even if I do fly, it will be based on cost considerations!

Seriously, any person worth his salt would rather put his money (even if it is “Monopoly” money) with Idris Jala of MAS than Tony Fernandes. Hot air and awards are great but fundamentals rule at the end of the day.

His tuning out at Tune Money together with the resignation of Tengku Zafrul Aziz highlights the challenges he face now as reported here. Tony’s interview (Pg BW3, Bizweek 1Nov2008) with the same paper is not in soft copy but it was very poignant that the footnote to the interview stated the following:-

“(Tony declined to comment on the airline’s funding plans for the aircraft nor about the privatisation of AirAsia)”

Tony’s in trouble and although he is quoted as “I’m very bullish”, that is because he is a non-believer in delayed gratification. He recognises all his benefits upfront! That is why his financials look out of this world! But these practices have a way of catching up with you.

Let’s just hope that the resolution of Air Asia’s troubles does not involve the Rakyats’ money!

 

 

 

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