AirAsia threaten to leave Sabah out ... losses by MAS and MAHB are a disgrace

KOTA KINABALU - AirAsia founder Tan Sri Tony Fernandes has threatened to take his business somewhere else if the low cost airline is forced to shift its operations at Terminal Two of the Kota Kinabalu International Airport (KKIA) to Terminal One.

"The biggest loser in the move will be Sabahans," he warned, Wednesday.

Fernandes who has plans to operate long haul AirAsia X flights out of Sabah besides launching new regional routes from the State said the problem he has is with the airport as moving to Terminal One would mean burdening his passengers.

"We don't want to do that because we have invested a lot of time in Sabah and we love the place. But I cannot make money if airport tax is RM65.

No one is going to fly. You want us to use aerobridge, expensive terminals, the fare is going to go up and we'll kill the market," he said.

Fernandes said during its infancy when AirAsia was just starting out, Terminal Two charged the same airport tax as Terminal 1 and the traffic was small.

"But as soon as the airport tax was reduced in both Terminal Two of KKIA and LCCT in Kuala Lumpur, we grew so rapidly. Count how many international (AirAsia) flights there are in Kuching? One.

Because I'm paying RM65," he said, adding that KKIA Terminal Two has more international flights than Penang for AirAsia.

He added that when they opened the Miri-Singapore route with the airport tax set at RM65, the business deal turned out to be a disaster and the airline had to close the route. Once the tax was reduced to RM25, the flights are always full nowadays.

"It's very sensitive. It's not rubbish I'm talking about. RM20, RM30 makes a difference. And if I'm with the airport, and there's an airline which wants to invest RM3billion to develop new routes É it's the volume, don't forget every passenger who comes internationally may buy duty free or something else. It looks pretty clear to me."

According to him, AirAsia had brought in 30 million tourists to Sabah over five years and opened up new routes, including nine international ones such as Hangzhou, Shenzen and Jakarta as well as new domestic routes such as Penang and Kota Baru in Kelantan.

Fernandes said the airline is targeting to bring in 13 million tourists a year into Sabah over the next five years.

Fernandes who took over Philippines' Zest Airways earlier this week said his plan of making Kota Kinabalu the hub of the BIMP-EAGA is coming to fruition and once Air Asia X starts operations, Kota Kinabalu would be the Dubai of BIMP-EAGA.

"The only thing we need now to make my dream real is the airport.

We have been in constant discussion over this matter. For me, we don't care where we are as long as the cost is cheap.

"We don't want to go to Terminal One and our passengers have to pay RM65. Why should Sabahans pay more when we want to make it cheaper?

Right now, everything is expensive, what we have done is make travel affordable.

"We hope Malaysia Airports Berhad (MAB) and the State Government would consider to either expand Terminal Two or build a new terminal," he said, adding that he would be willing to develop Terminal Two himself if he was given the chance.

He said Air Asia X should have started its operations in Kota Kinabalu two years ago, bringing with it employment opportunities and extra tourist receipts, if not for the airport trouble.

"That is the next stage, bringing Air Asia X here. Sabah is going to help me justify the financial side of it in making it happen," he said, adding he has the full support of Chief Minister Datuk Seri Musa Aman on the matter.

He said he met Musa earlier in the day and was told about the 700-acre Tanjung Aru Development Plan.

"It makes sense to have a big terminal right by the development, " he said.

Three years ago, Fernandes pledged to fight tooth and nail against moving its operations to Terminal One, including chaining himself to the Terminal Two fence if necessary.

The proposal for AirAsia to operate from Terminal One was part of the Federal Government plan to convert Terminal Two into a cargo terminal, arguing that having all the carriers at Terminal One would streamline operations that would benefit air travellers especially those who need to switch flights.

However, critics favour budget carrier flights to stay put at Terminal Two because it would cause congestion if everything is concentrated at Terminal One. Besides, they said it did not make sense for Terminal Two - the main air entry into Sabah until 1985 - to be a cargo terminal after spending over RM1 billion of taxpayer's money to upgrade and expand it.

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Tony says losses by MAS and MAHB are a disgrace

KOTA KINABALU - Putrajaya needs to review aviation policies as it can't afford to spend taxpayers' money on loss-making Malaysia Airlines (MAS) which bled RM1.2 billion last financial year, said Fernandes.

He said he was "shocked" at the amount of losses suffered by MAS.

"The whole aviation industry needs a relook," he said, adding that the industry's policies and airline management need to shape up.

"MAS and Malaysia Airports Holdings Berhad (MAHB) have to start churning profits to avoid burdening taxpayers. My point is that if you're running a private company, could you afford to cut 16pc of your costs and still lose RM1 billion?" he asked.

"It's only because there's taxpayers' money that one can afford to do that. And this isn't solving the issue," he added.

MAS had reported its fourth straight quarterly loss for 2013 and chalked up RM1.17 billion in losses for the year - three times as much as in 2012.

The state-owned carrier has been implementing cost-cutting measures to cut its expenses such as axing several routes and introducing lower ticket fares to increase its load.

However, the airline is also awaiting government approval to purchase 100 Airbus and Boeing passenger aircraft that would amount to several billion ringgit.

A Reuters report said that the airline's decision to spend on newer aircraft is to boost profitability and retire its older, less fuel-efficient aircraft.

Fernandes, meanwhile, criticised MAS and MAHB's continued spending and losses.

"It's supposed to be profit-making. This just hurts decent players in the business when they're spending like there's no tomorrow," said Fernandes.

According to MAS's website, the carrier has 88 aircraft in its fleet, including Airbus A330s and A380s, and Boeing 777-200s and 737s.

The airline's expenditure also went up by 10pc last year to RM14.9 billion year-on-year due to high fuel prices.

MAS posted its highest ever loss in history when it recorded RM2.52 billion nett loss in 2011.

The company , however, managed to narrow its losses to RM433 million in 2012.