CIMB & Bent Politicians are invading Malaysia Airlines to SAVE Air Asia

The ladies in Khazanah said the MAS-AirAsia deal is “not a bail-out” of MAS for Air Asia.

Then what the heck the collaboration with AirAsia for?  AirAsia is operating at 40 times of its Price Earning ratio and AirAsia stocks are overpriced.  Actual stocks are worth only RM0.367 cents is being sold at RM3.679.

The Tony boy coupled with Rosmah Fatty Boom Boom are cooking up the numbers to set the market up and killing the KLSE rules.  Imagine Rosmah fatty boom boom if skimmed half her current weight and holding a broom, we will see “century old witch granny”.

What our Malaysian father said about AirAsia?

Dr Mahathir Mohamad said MAS “can learn” from AirAsia on ways to cut costs.  Wasn’t he the one who screwed MAS putting Tajudin Ramli that tuning MAS into a Cash Machine (MCM-Mahathir Cash Machine) for Mahathir’s cronies of whom were the politicians during his reigning days?  Many were benefiting from the contracts approved by MAS through supplying, catering, polishing aircrafts, procurement, uniform for cabin crew etc.

Why can’t Mahathir says we should learn from Lee Kuan Yew or the “KIASU” Airlines (practically our busybody neighbor)?

Everyone in Malaysia know Mahathir Mohammad is well-known for his “10% commission charged” back then during his reigning days.  The evening minister’s (p.m.) wife has emulated from Mahathir a double times of commission charges.

We have learned that Mahathir always says something reversing and when he says MAS should learn from AirAsia, it should be the other way around which is Air Asia should learn from MAS in fine tuning the airlines businesses into political arena cum businesses that are only available for Mahathir’s cronies.

Let’s look at Tony Fernandez’s talent on AirAsia records.

As of the first quarter of 2011, AirAsia debts amounted to RM7.7 billion with cash balances amounting to RM1.7 billion.

Further in August 2010, AirAsia announced a deferment of its proposed aircraft purchases but in March 2011 it had placed an order for an additional 200 NEO aircrafts at the Paris Air Show. How scheming it is in spending frivolously before declaring bankruptcy?

AirAsia’s skyrocketing debts
As of March 31, 2011 (first quarter report), AirAsia’s capital commitments stood at RM19 billion.  With the latest announcement, an additional RM54 billion will be added as capital commitments.

The proposed capital commitments of about RM74 billion will be spread over a 15-year period ending 2026 which means AirAsia has to increase its earnings to an average of RM5 billion per annum to meet its future dues.

From 2006 to 2010, AirAsia’s revenue grew by ten-fold from RM110 million to roughly RM1.1 billion. This is an average growth of RM200 million per annum.  How will Air Asia reach a “RM5 billion” growth per annum?

AirAsia’s cash reserves rose six-fold from approximately RM300 million to RM1.7 billion. But its debts skyrocketed from RM1.05 billion in 2006 to RM7.7 billion in 2010, an increase of 700%.  This is surely debt burdening that spiraling “outta” control.

This indicated Air Asia will be heading into Chapter 11 when the adverse global economy hits air travel industry later.

MAS recently under Air Asia scheming group in-charged by Tony Fernandez declared the opposite that MAS would file for Chapter 11 if the collaboration with Air Asia is ceased.

Does it make sense?  It sounded Tony boy is very desperate for swallowing MAS big fat cash flow.

Air Asia’s debt with Malaysia Airports Bhd (MAHB) has dragged on forever and the government is still negotiating with Air Asia for Malaysia Airport new Service Level Agreement.

The only bank in Malaysia that welcomes the well-known bad debtor for AirAsia (Tony Fernandez) is CIMB that belongs to the current and appointed evening minister’s (p.m.) brother.

While Air Asia is still owing MAHB millions of ringgit and whenever actions were taken against them, the small boy would run to their chief, Abdullah Ahmad Badawi for shoulder to cry on and to call off the chase.  

These days, the small boy has turned to Mahathir and Rafidah Aziz for protection by putting them as AirAsia Advisor and Non-Executive Independent Chairman for AirAsia X.

MAS’ strength
MAS’ wealth is actually its network and position in the Tier-5 star airline market. MAS’ annual operating turnover is RM12.98 billion versus AirAsia’s RM 3.948 billion.  MAS’ operating revenue from airline operation is at RM11.649 billion against AirAsia’s RM2.839 billion.

MAS has a paid-up capital of RM3.384 billion and has a fixed asset value of RM8.4 billion.  Its net asset is at RM 6.962 billion, where cash constitutes RM 2.086 billion but AirAsia has borrowings of up to RM7.7 billion and its cash position is RM1.7 billion.

Khazanah has given away 20.5% of its holding in a company with a bigger network, acclaimed higher standard of service and bigger operating revenue with stronger assets and lesser debts but more cash and better paymaster track record to another company with lesser track record.

Where is the rationale if not a crystal clear corruption practice?

AirAsia’s strength is that it excels in hyped-up marketing and showing it can make a lot of net money in shorter time but ended up swimming in the pool of debts only.