when Tony did a political campaign for the cow he has become a cowhimself
Indian Kingfisher and Malaysia Air asia: An endangered species, warn experts When you buy a haunted airasia,Tony,you get the ghost for free perhaps, a more appropriate analogy would be that of someone buying a haunted house. True, the buyer did not bargain for a ghost in the house, nor did he pay for it; but it is there with him, whether he likes it or not. He can keep ranting that he just bought the house and so it is entirely wrong for the ghost to haunt him, but that would get him nowhere. He has get Mahathir to finally exorcise the ghost.
When Tony F launches his guerrilla tactics, how are people taking that?
“What is this chap from airasia trying to prove? Who is he to declare war on the authority? If he cannot accept the increase, move to somewhere else where he does not even require to pay anything for that matter (that is if he can find such a place). How about Indonesia that he has been harping about? Go man, go, nobody is going to stop you from moving away. He only knows how to pin-point on others, what about himself e.g. all those unreasonable charges that he has imposed on the travellers? Aren't all these increases from his end driving the cost of travelling up too? His agenda is very clear i.e. to make as much as possible at the expense of others including MAHB. Only AA can increase on anything that this bloke and his team can think of as and when they like but not others!
Umno lawmakers accused Tan Sri Azman Mokhtar and Tan Sri Tony Fernandes today of cheating the public in the Malaysia Airlines (MAS) and AirAsia share swap.
Kinabatangan MP Datuk Bung Mokhtar Radin called on Khazanah chief executive Azman to be investigated by graftbusters after the state investment agency exchanged 20.5 per cent of the national carrier for a 10 per cent stake in Asia’s top-performing budget airline. The Malaysian Anti-Corruption Commission (MACC) must call Tan Sri Azman ... all of them ... if there is any misappropriation, stuff them into jail,” the Barisan Nasional (BN) backbenchers deputy chief told Parliament. “How can Khazanah be fooled? Azman Mokhtar, how can he be so stupid, to be ‘tuned’ by Tony Fernandes. If I was in such a position, I would resign rather than troubling others. “Maybe they are not stupid. Maybe they get huge profits by squeezing and grabbing money from the public,” he said, referring to the AirAsia CEO’s company Tune Air which now owns a fifth of MAS.
Sri Gading MP Mohamad Aziz also accused AirAsia of “clearly cheating the public and now trying to cheat MAS.” “If this kind of man (Fernandes) can control us, God forgive us,” he said while debating Budget 2012.Bung Mokhtar also said the government should “not be scared of Fernandes. Whatever he wants, we give. He wants to overcharge for excess baggage and suck the blood of poor villagers.
KING OF GOOD TIMES NEWS NETWORK
BIRD'S NEST (B'LORE): The Common Kingfisher (species: Alcedo atthis) is fast disappearing from Indian skies. At last count, fewer than 66 were spotted across the country, most of them spreadeagled on the ground. “It’s time to rename the species asAlvida indus,” quipped a renowned ornithologist who has watched the bird at close quarters.So what went wrong? How did the once UBiquitous Kingfisher (it flew as many as 400 times a day and was seen in several cities across the country) become UBquietus overnight?Most experts this reporter spoke to were unanimous in attributing the Kingfisher’s bloated body to indigestible hubris and its clipped wings to the Rs 7,000 crore weight on its shoulder.Back in 2003, when the young Raja of Maalyapoor, who has a keen eye for birds, first proposed to breed the Kingfisher in India, people were happy. They had had enough of the despotic rule of the old and ailing Maharaja. So when the first Indian Kingfisher took to the air in 2005, they were more than willing to anoint the Raja of Maalyapoor as the new Heir India.The Kingfisher’s attractive plumage (backed by its good-looking handlers in the air) became a talking point among bird-watchers and people who flew regularly. Its desi habitat was wide and the pickings were rich. Of course, things didn’t come cheap, but you can’t fly the good times if you are not loaded. At least that was the motto of the new Blahraja of Maalyapoor.He too had spread his wings in the meanwhile. He wanted to consolidate the assets left to him by his pioneering father. His efforts included ordering newer and very expensive species of the Kingfisher from France on credit, gobbling up a low-flying but popular bird that went by the name of Air Deccan, and extending the monopoly of the spirits business.But wild dreams often lead to nightmares. And high-fliers are brought down to earth with a thud.It's hard to say whether it was the Raja of Maalyapoor’s inflated opinion of his bird-breeding abilities or the wrong advice given by his courtiers that led to the steep decline of the Kingfisher.The wet leases on the fancy new birds were squeezing the Kingfisher dry. The debt doubled, tripled and crippled Maalyapoor’s finances. The focus had shifted from the bird to its beautiful handlers who also went by the fancy titles of Flight Commanders and Flight Stewardesses. And the Raja, who certainly did not have the business acumen of Richard Branson, another UK-based high-flier, succumbed to their demands. He felt that it was far more important to keep up appearances than to get to the root of the problem.By and by, the Raja of Maalyapoor’s innumerable creditors mounted the pressure. UBequity plummeted. The king was forced to leave his Ivory Tower in Bangalore and face reality on the ground.As things looked bleak, the Raja, aka Guzzle King, hit upon a brainwave. He decided to ask the government of India to bail him and his birds out. He also sought permission to let foreign funds in to salvage the situation. When the going gets tough, ask what the country can do for you, he told his minions and his friends in sarkari raj.However, by now, public opinion was soaring against the flightless bird. Hawks in India Inc spoke sharply against favouring the Kingfisher. Let the Maharaja use his own funds to keep it flying, was the general sentiment among lenders, corporates and the public alike. “In a commercial jungle, those who die must die,” said one bizman. "As the Sanskrit proverb goes, it's foolish to dig a well after the house has caught fire," said a management guru.As things stand, despite the PM promising to look into the bird's existentialist crisis, the outlook looks bleak and blue for the Kingfisher in Red. The Raja of Maalyapoor is banking on his moneyed friends to bail him out. But any bird-brain will tell you that birds of a feather flock together only in good times. In bad times, business friends fly off faster than a Kingfisher dives into water.AirAsia’s success story has begun to falter amid charges of poor service, inflexibility, hidden charges, deceptive pricing and anti-consumer practices designed to squeeze the maximum from passengers. Whenever there is a news item on AirAsia in malaysiakini, Malaysian Insider and other online sites readers’ comments are almost wholly negative towards the airline. It is unusual for a budget airline which purports to provide affordable flying for passengers to end up on the wrong side of public opinion but AirAsia has certainly succeeded.
When did AirAsia descend from a public champion to a money grabbing witch? To be sure this did not happen suddenly but has been ongoing for years. The negative public perception against AirAsia has reached an alarming level and cannot help but affect the airline’s business. The suit by the Australian consumer watchdog ACCC did not help.
Copying Outdated Practices
AirAsia copies a lot from Western budget airlines like Virgin Airways but some of what it copies are outdated or culturally unsuitable for local customers. It may seem clever to refuse to check in a passenger who arrives 1 minute later than the counter closing time so that he has to buy another ticket but Malaysians find this very infuriating especially when other airlines have been very flexible. MAS will allow you to check in as long as you can make it to the boarding room before the plane flies.
Other practices which do not go down well with passengers are credit card charges, counter check-in charge and seat selection charge. The first two may be considered hidden charges as they are non-optional and should be added to the fare in the first place. Those who do not pay to select seats (currently at RM35 per passenger from KL) are randomly distributed so families will be split up. This is especially annoying as passengers are not charged for any real goods or services but for the right to sit together which should be theirs in the first place. It’s like taking something away which should be yours and demanding a fee to give it back.
But probably the most aggravating is AirAsia’s RM1.95 a minute charge to talk to a service staff. It may be for something which is not their fault like flight delays, claim of refund, lost luggage or being overcharged on their credit cards but having to pay by the minute to complain is really annoying. To add insult to injury they are frequently made to wait on hold while the charge keeps ticking.
Is AirAsia Really Cheap?
AirAsia practices a sliding scale of pricing depending on when you book. Early birds get cheap prices which are probably below AirAsia’s cost while late comers will be charged more. Then there are the gimmicky promotion giveaway seats which have to be subsidized from somewhere and it’s not from Tony’s pockets. The upshot is that AirAsia is not always the cheapest and can be more expensive than regular airlines. As nobody will pay more than a regular airline for a budget airline AirAsia tries to hide its real pricing and make it difficult for customers to compare.
This pricing model of gouging Peter to subsidize Paul does not work anymore. Consumers are getting savvier with tight social networking and no longer assume that AirAsia is always the cheapest. They will buy when AirAsia’s prices are cheap and stay away when prices increase. There are still some ignorant ones who do not compare prices but depending on consumer ignorance is never a good business model. This is like BN depending on the rural Malays to be forever supportive through poor information.
During last year’s peak Christmas to New Year period AirAsia was flying between KL and Melbourne with empty seats while all regular airlines were sold out. This is extremely unusual for a budget airline which should logically be the first to be sold out. Passengers have wised up to AirAsia’s pricing tricks.
Customers should also compare beyond the basic fare. Things like food, entertainment, comfort kit and baggage have to be priced in as well as other extraneous charges. Passengers also fly from the LCCT which is a pathetic excuse for an airport and they have to walk a long way to the plane as AirAsia will not pay for aerobridges. This makes AirAsia unsuitable for senior citizens. Then again AirAsia usually flies to remote airports which may cost more to get to the city.
There are also hidden costs. AirAsia is really only cheap if you book far ahead and pay upfront. It accepts bookings as far as one year ahead. This means your money is tied down and any change in schedule can be very painful as AirAsia will levy a heavy charge out of proportion to the ticket just to change a date. Some consumers will find that paying a little more for flexibility is not a waste of money.
Delays and Cancellations
Those who fly AirAsia know that delays and cancelled flights are far more common than other airlines. AirAsia has the dubious practice of combining flights if passenger loads are low without regards to disrupting their passengers’ schedules. The fine print on their tickets claims they have the right to do this. Only a country with weak consumer laws like Malaysia allows them to get away with it.
Those whose flights have been cancelled and are entitled to a refund find dealing with AirAsia an exercise in patience and perseverance. Contacting AirAsia staff is an arduous task in itself. Some customers say they are asked to wait 30 to 60 days to process their refunds and when the time is up AirAsia can come up with another excuse to reset the waiting time.
Long upfront payment, inflexibly, inconvenience, risk of delay and poor service means that customers will demand a big price gap from regular airlines to fly AirAsia. This means that eventually AirAsia will only be able to sell if their prices are very cheap and below cost. Passengers will look elsewhere when prices approach regular airlines.
A case in point is AirAsia’s cancellation of routes to London, Paris, New Delhi and Mumbai. These are popular routes to densely populated cities which any budget airline should be able to work successfully. AirAsia’s stated reasons like visa requirements and additional taxes do not make sense as they apply to all airlines and can be added to the fare. The real reason as reported in The Star is that AirAsia is losing millions on these routes every month. So why can’t AirAsia raise its prices? The reason it can’t is because passengers will flee to other airlines. They are demanding a price gap to fly AirAsia which the airline cannot provide and still remain profitable.
The Writing is on the Wall for AirAsia
AirAsia may have started on good terms with the public but the honeymoon period is over. Its service has fallen to abysmal level and it is treating its own customers with contempt. AirAsia is behaving as if it is operating a monopoly when no such monopoly exists.
Passengers have a choice of other airlines including budget ones like Jetstar which has been complimented for its transparent fixed pricing. Air Emirates is encroaching in on AirAsia’s lucrative KL-Melbourne route with very competitive prices. Hoping that its new KL-Sydney route will be as lucrative may not happen as SIA will soon launch a new budget airline called Scoot which will start with the Singapore-Sydney route.
AirAsia has obviously not come to terms with the power of social media. In the old days an enraged customer can do limited damage as he can only influence his immediate family and close friends. These days they can vent their rage in online forums, facebook and twitter and influence hundreds if not thousands.
Horror stories about AirAsia abounds online. Some say they find AirAsia staff so difficult to contact that they are forced to buy another ticket when they just want to change a departure date. One angry customer said he has been waiting 2 years for a refund with serial excuses from AirAsia. One passenger was especially unfortunate. He reached the airport to find the check-in counter closed and the staff agreed with him that it was closed earlier than the stipulated time. She made a phone call but was not allowed to re-open the counter. As a result the passenger missed his flight and his connecting flight and to top it off Air Asia refused him a refund.
There seems to be a culture of unsavoury practices to try to squeeze all they can from passengers even to the extent of forcing them to buy another ticket. Such corporate greed will drive customers away. My sister was asked to pay RM1000 to change the date of departure for a KL-Melbourne flight. She has declared that she will fly Air Emirates from now on.
Tony Fernandez should put his mega plane buying on hold and work like hell to improve AirAsia’s customer service and public perception. He should step out of his dream world that every year will be the best ever year for AirAsia. The writing is already on the wall and if AirAsia crashes it will be a pity as it can be said to be the only Malaysian global brand.
Now I hear he has a plan in the future to take over all domestic flights and MAS will only have international flights. If we give this to him, the country will be in ruins. It will be the end of the world for us,” he said. Bung said if the government could not provide a satisfactory answer, it meant that “government officials colluded with AirAsia and has vested interests.” The MAS-AirAsia swap has come under fire from both sides of the political divide as well as employees of MAS who believe the deal will affect their careers.
Why mahathir Tony F all the way. See? We are starting to cry.The real issue here is this and Azman Mokhtar and his band of financial re engineers countenanced this- that the only people who can make money nowadays in Malaysia are the owners of Air Asia. Other people cannot make money too.
Tthe bosses of MAHB. If they are weak and can’t put their foot down, they are not worth defending. If they are inefficient as bosses of GLCs normally are, remove them. Bashir or no Bashir. Give them the boot. They should be let off to greener pastures. Show us la- you have the balls to compete and defend your turf.
You have a piece of asset that you can capitalize on- the airport and all the services therein. If you have to invest in the best automated system in baggage handling and all other things such as buying tickets by placing your hand phone over reading-machines, you invest in all these things because you can make people pay for all these conveniences. The problem is you are not using the material between your ears to the fullest. And I am not taking about your bulbous noses!
Azman mokhtar will now have a new case to present the PM perhaps through his main backer- the CIMB Boss. Since the people at MAHB don’t know how to run airports maybe in the interest of efficiency, we allow Tony F to make his own airport. Or allow his to acquire shares in MAHB. You will complete the vicious circle them. From airlines to airports.
Better still- make the airport in a god forsaken place- or a far flung place- Tebedu or Gua Musang, just construct a few shed with zinc roofs and people walk across an open field, no tarmac even, no aerobridges, no baggage handling machines, no cargo handling and everyone can fly. Everyone lugs their baggage and cargo themselves. That will lower costs.
The MAHB can make money through baggage fees and cargo handling. While these items stay on the premises of the airports, airport owners have the right to make money. If they raise the fees unnecessarily, the consumers will vote them out. Now, when these are on the planes, the plane owners make money.
Here the case is, plane owners can make money and want to, airport owners cannot.
Plane owners know baggage fees and cargo handling are significant contributors to the income of their companies. These are even described as gushing streams by Tony F. Maybe in private, they are described as squirting streams.
The problem is Tony F doesn’t want Malaysian Airports Holdings Bhd to be part of that "gushing stream". Only AA wants monopoly over the squirting sources of revenue. Otherwise plane owners only make money on top of the charges levied by airport owners and Tony F knows that that each cent added to "his" "gushing stream" means an additional burden on passengers who are then likely to revolt against all charges. This could in turn lead to a forced scaling back of charges, causing the "gushing stream" to weaken, possibly to a point where AirAsia cash flows will be adversely affected.
When Tony F launches his guerrilla tactics, how are people taking that? Perhaps that feeling is best represented by a short e mail to me, sent by a person using the name of JL.
“What is this chap from AA trying to prove? Who is he to declare war on the authority? If he cannot accept the increase, move to somewhere else where he does not even require to pay anything for that matter (that is if he can find such a place). How about Indonesia that he has been harping about? Go man, go, nobody is going to stop you from moving away. He only knows how to pin-point on others, what about himself e.g. all those unreasonable charges that he has imposed on the travellers? Aren't all these increases from his end driving the cost of travelling up too? His agenda is very clear i.e. to make as much as possible at the expense of others including MAHB. Only AA can increase on anything that this bloke and his team can think of as and when they like but not others!
Over to MAHB, please do not let this bloke from airasia get away scot free. Nail him by his balls. Make him move his outfit out of MAHB premises the sooner the better. His throwing of insults via his tweet & Facebook should not be tolerated. Should MAHB remains unmoved, MAHB will be sending the wrong message to all and sundry on the type of government we currently have. MAHB will directly or indirectly encourage others to do likewise. MAHB, please take action where necessary. MAHB is in business to make money (always remember that). Tax payers are already fed up with all the bail outs.
Will Tan Sri Basir Ahmad please put your feet down once and for all to shut this blokeairasia for good. Do not even border Mahatir is behind this bloke. He needs to be humbled in a big way and urgently too
This chap from airasia is getting out of control and his behavior is real teruk to mention the least. He may think that he has some big guns behind him that is why he is getting uncontrollable which is bad for the rakyat and the world at large.
Please Dato' we have to collectively bring this guy down to eat his humble pie failing which I am sad for the government of the day and the GLC involved.
NEW DELHI: Airports Authority of India (AAI) can no longer put off increasing landing and parking charges for airlines, a senior official said. "Airlines are in a very bad shape with Air India and Kingfisher running up huge dues that they are unable to pay. We were avoiding seeking a hike in airport charges, but now it has become unavoidable for us as AAI has been augmenting infrastructure in the form of new terminals and runways across the country. We need at least a 200% hike and will move Airport Economic Regulatory Authority (AERA) soon," he said. Airlines and other industry stakeholders are opposing the hike in airport charges. They are also opposing the steep new levy called user development fee that DIAL wants to charge from passengers from April. Some airlines have announced withdrawal of flights from Delhi and others have threatened to do so as an over-threefold hike has already been approved for IGI Airport from April. The International Air Transport Association (IATA), for instance, pointed out at a recent AERA meet to discuss the proposed hike at Delhi airport that IGI would have the highest (user) charges in the world if the 334% hike comes through. It called for a review of the agreement under which DIAL shares 46% of its revenue with AAI. Both foreign airlines and desi ones like Air India, IndiGo and SpiceJet opposed the hike, with SpiceJet's senior VP Kamal Hingorani claiming such a move could even lead to "closure of some airlines"
Flying is likely to become costlier this year as the Airports Authority of India is planning to demand that landing and parking charges for airlines be "at least" doubled. This comes close on the heels of the 774% hike sought by theDelhi International Airport Pvt Ltd (DIAL), with the regulator approving a 334% increase from April. Mumbai airport is also learnt to be in the process of demanding an increase in charges.Once the AAI demand is approved by the Airport Economic Regulatory Authority (AERA), the enhanced charges will be passed on to passengers in form of higher fares. This will be in addition to new charges at places like Delhi and the general increase airlines are contemplating to cover their massive losses.While airlines are opposing any hike in airport charges and asking operators to increase cash flow by lower tariffs to get more footfalls, airports have also begun citing massive losses and non-payment of dues from nearly bankrupt airlines.Kingfisher Airlines is deep in the red. Should the government organize its rescue? Critics say that it has already been rescued in the past thanks to Vijay Mallya’s political clout, yet it has never made a profit since inception. When millions of small businesses are allowed to go bust when banks cut off credit to thousands of smaller defaulters, rescuing Kingfisher will smack of crony capitalism.The airline has defenders too. Kingfisher has justly earned a reputation for excellent service standards. Quality is always worth preserving. We need to save Kingfisher without saving Mallya.Its main competitor in quality, Jet Airlines, has frequently made good profits, while Kingfisher never has. So Kingfisher cannot claim that its problems are common to those of other airlines, many of which are also in the red today. There is a case for reducing burdens on the whole airline industry, but such general relief will not suffice to pay Kingfisher’s enormous overdues.India’s airlines suffer from high taxes on fuel, rising world prices and an obligation to service some uneconomic routes to destinations like the Northeast. Yet this did not prevent them from making profits in the past. Even today, Indigo is profitable.So are many global airlines. Top US carriers like United , Delta and US Air reported good profits in the last two quarters. Indeed, in the quarter ending June, United Airlines turned profitable after losing money for six years, Delta reported the highest quarterly profit in history and Lufthansa doubled its profits. The quarter ending September has been only somewhat less profitable for them. So, Kingfisher and other Indian carriers cannot claim that global conditions are terrible.Many global airlines have been rescued time and again. Political considerations have often dictated government rescues of national carriers (as has also been the case with Air India). Yet the three biggest US giants of yesteryear—Pan American Airways, TWA and Eastern Airlines—have ceased to exist. That should be the norm in any market economy.Kingfisher has already been rescued. Banks converted unpaid loans to Kingfisher into equity at a very favourable premium of 62% to the ruling market price, a tribute to Mallya’s political clout rather than company’s future prospects . Even after that the company has sunk deeper into the red. Even after being restructured and slashed, its debts exceed Rs 7,000 crore. Government concessions to the industry may save other airlines, but not Kingfisher.Afailed management must be changed. That’s normal in a market economy. Giving managements a second chance is often a good idea, but Kingfisher has already been given fresh chances through concessions and rescues , but in vain.One way forward is for banks to convert a big chunk of their outstanding loans to Kingfisher into equity at the current market price, giving them a 51% stake in the company . This can then be auctioned to the highest bidder. This will be clean and quick, free of the crony capitalism that afflicts government handouts to business.If Mallya really wants yet another chance, he must be told to bring in at least Rs 3,000 crore of fresh equity. If he cannot entice the investing public—which is probable--he must sell his other assets. Apart from liquor company UB Holdings, he owns stakes in the cricket team Royal Challengers, Bangalore; the Kolkata football teams Mohun Bagan and East Bengal; and the Formula 1 team Force India. In many other countries his bankers would force him to sell these.Indeed, UB Holdings itself is reported to have provided bank guarantees of over Rs 16,000 crore to the banks. In many other countries, such bank guarantees would be enforced , obliging Mallya to hand over UB to his creditors too. Globally, rescues entail sacrifices by not just creditors but the owner too. If politicians ask banks and other creditors to go easy on the owner, that is called crony capitalism.If Mallya will not sacrifice his other assets for Kingfisher , then he cannot ask others to sacrifice their financial interests for him. His creditors should acquire the company and auction it.There will be plenty of bidders, even if the government keeps out foreign buyers. Ratan Tata will be among the keenest of these. Remember, the Tatas owned Air India before it was nationalized. Ratan Tata tried hard to acquire Air India in the 1990s but in vain.However, hecould easily be outbid by many other Indian groups that have plentiful cash reserves. Many of them have started investing abroad for want of suitable opportunities in India. The auction of Kingfisher would be a very suitable opportunity.
0 comments:
Post a Comment