Tony Fernandes will over see the Air Asia Group

By Business Times (Koi Kye Lee)

AirAsia Malaysia's new chief executive officer (CEO) will take the airline into another league, said AirAsia Group CEO Tan Sri Tony Fernandes.

"I am very excited by the announcement and it shows the progressive nature of AirAsia and I think when this person is announced, you can see their career and how far they have come," he told reporters yesterday after witnessing the signing of a Facilitation Fund Grant agreement between Epsom College and the Public-Private Partnership Unit (UKAS) in the Prime Minister's Department.

"Actually, I am dying to announce the name but I have got to keep quiet, so come Monday, I will tell you and I think it is going to be a good day for corporate Malaysia in many ways," Fernandes said.
AirAsia is currently in the process of restructuring its management to accommodate the shift in emphasis on its future growth plans.

It was recently reported that Fernandes will be announcing the key personnel to run the regional structure as well as new AirAsia Malaysia CEO on Monday (June 18).

Business Times reported last week, quoting Fernandes, that the new CEO will be managing the operations in Malaysia, while he will be overseeing all AirAsia operations in Malaysia, the Philippines, Thailand, Indonesia and Japan.

MAS able to become profitable again with oneworld member?

By The Star

By year-end Malaysia Airlines (MAS) would have become a full member of the oneworld alliance and would be able to offer connectivity to about 800 destinations in 150 countries by riding on an expanded oneworld network.

“This membership will be among the significant catalysts that will complement our efforts to win back customers and become a profitable preferred premium carrier as outlined in our Business Plan,'' said MAS group chief executive officer Ahmad Jauhari Yahya.

Jauhari said the entry into oneworld would enhance its network considerably while providing baseload demand from fellow oneworld members.

“The prospect of being able to offer improved global coverage and connectivity through an expanded network of great airlines to MAS guests is indeed very exciting. Our customers, in particular members of our Enrich loyalty programme, will benefit from increased rewards and recognition while enjoying more seamless air travel options “We look forward to our full membership that will improve our brand awareness among the alliance members' customers and enhance our load factors through additional partner traffic,'' Jauhari said when witnessing the entry of airberlin into oneworld on Tuesday.

Airberlin now serves 162 destinations in 40 countries with a fleet of 170 aircraft and a workforce of 9,200 employees and it became part of oneworld, adding the second biggest airline in Germany and the sixth biggest in the European continent overall to the airline alliance. Austria's NIKI, also a member of the airberlin group, joined oneworld as an affiliate member at the same time.

Other oneworld members include American Airlines, British Airways, Cathay Pacific, Finnair, Iberia, Japan Airlines, LAN, Qantas, Royal Jordanian and S7 Airlines, as well as 20 affiliates including Austria's NIKI, American Eagle, Dragonair, LAN Argentina, LAN Ecuador and LAN Peru.

Malaysia Billionaire:

Oneworld is just a platform that convenience the internet users to book their air tickets, where you are able to garner all the flight information across the globe provided the participant airliner is a members. I personally think it would not make sure impact on MAS profits.

Malaysia Locally Assemble VW Passat

By YS Kong - autoworld.com.my

Pekan, 11 March, 2012 – It is here at last – the locally assembled Volkswagen Passat was unveiled today by the Malaysian Prime Minister YAB Dato’ Sri Mohd Najib bin Tun Haji Abdul Razak in the royal town of Pekan, Pahang, at the DRB-Hicom plant. This historical moment represents the first fruits of the collaboration between our local automotive conglomerate and the Volkswagen Group, which began with discussions that resulted in the auspicious signing ceremony held at the end of 2010.

Present at the unveiling were the top management of DRB-Hicom, including Dato' Syed Mohamad Syed Murtaza, Chairman of DRB-Hicom, Dato Sri Haji Mohd Khamil Jamil, Group Managing Director, DRB-Hicom, and top management from Volkswagen, Dr. Christof Spathelf, Senior Vice President, Group Manufacturing Overseas and Mr. Soh Wei Ming, member of the Board of Management of Volkswagen, and Head of Commercial Operations, China/Asean. Also present was Mr. Ricky Tay, Managing Director, Volkswagen Group Malaysia.

According to a follow up release, the Volkswagen Passat is priced at RM170, 888, and will be available for sale at all the 18 Volkswagen outlets nationwide. The release also stated that the Passat will have other variants, and the price will range from RM169,888 to RM184,888, according to specification and trim levels. We understand that some 300 units are already assembled, and ready for delivery.

According to Dato Sri Khamil, this collaboration with Volkswagen will eventually boost the production volume at the Pekan plant from its current 23,000 units a year to 50,000 units when the full complement of the planned local assembly is activated. Although at this time, Dato’ Sri Khamil did not specify what models are to be assembled, we do recall a year ago during the initial signing ceremony between DRB Hicom and Volkswagen that the Polo sedan and the Jetta are the planned models.

Immediately after the launch, some members of the media who attended the ceremony were given a first-hand taste of the locally assembled Passat in the form of a 300 kilometre drive from the Pekan plant to the Glenmarie golf and Country Club in Shah Alam. Having seen and driven the CBU Passat not too long ago, we found the locally assembled Passat to be just as good. The parts for these first 300 units come as a total package from the Volkswagen Group – there is a target of 40 percent local content, and according to Dr. Spathelf, the local content will be introduced in stages, and all local content parts must meet the quality standards of Volkswagen before they can be accepted.

The test of the local assembly would be in the fit and finish, the door gaps and trim integrity – our first impression of the test units, and there were twenty of them on the road today, is that the local units are indeed as good as the imported units.

Malaysian Billionaire:

So finally they made it, based on my previous posts. Here & Here

The price different between a local assembled (CKD) VW Passat and a fully imported VW Passat would be RM14k.

OTR (Without Insurance) Fully Imported = RM 185,967.20

OTR (Without Insurance) Local Assembled (CKD) = RM 171,967.20

I personally preferred the VW Passat CC which is priced @ RM256,060.00 / RM 271,060.00 (Sport).

Does MAS payout bonuses to employees in this time around?

By The Star

It is about time Malaysia Airlines (MAS) is sold, and some have even suggested that it be sold for a ringgit.

Those who love MAS will fight tooth and nail to keep it but the reality is, selling it may just be an option to hopefully end its woes.

A decade ago, Tan Sri Tony Fernandes and his buddy Datuk Kamarudin Meranun paid a ringgit to buy AirAsia, which had two aircraft. They also took on RM40mil of the debts.

After seven months of operations, AirAsia managed to repay all its debts and made a profit of RM19.4mil.

That is history, but today, AirAsia has over 100 aircraft, operations in Thailand and Indonesia, and these two companies are slated for a listing this year. Japan, Philippines and even the Middle East are AirAsia's playgrounds and its cost is the lowest in the world because it is run by two entrepreneurs who are constantly thinking of how to rev up profits.

That is what MAS needs, not just cuts.

MAS has been through enough shake-ups, cost cuts and route cuts to be profitable but yet it falls into the red. The question is, will all the cuts this time around save the airline?

Will MAS be profitable and how profitable can it get?

On Thursday, MAS again shocked the market with a RM2.5bil net loss for full year 2011 and some of its own employees were dumbfounded with the figure.

The loss included a RM1.09bil provision, which was a non-cash item.

If you strip out the provision, the actual loss is about RM1.4bil. The provision is an accounting treatment which some analysts refer to as “kitchen sinking.''

Whether that kind of provision is necessary is up to the new team. But by so doing, it is taking the hit all at one go, so that when things improve, it can show profit. Whatever, they should know what they are doing.

Coming back to the point of selling the airline - of course there is also the contratrian view, since the airline was privatised before and had to rescued by the Government a decade ago. So why sell again?

The issue here is about positioning and for now MAS is often referred to by players as a second tier premium carrier whilst rival Singapore Airlines (SIA) is the first tier, and best in class.

The question ahead is also about survival in a highly competitive climate where even the biggest of players are merging and forming alliances and some have gone into arming themselves with both the premium and low cost suite of services to serve different market segments.

Take the example of SIA, it has both the low cost and premium products via its units, so has Thai Airways International, ANA, Qantas and even Japan Airlines.

SIA offers short/long haul premium services, value via Silk Air, short haul low cost via Tiger Airways and soon, long haul low cost via Scoot.

The share swap between MAS and AirAsia owners does limit competition and the collaboration is supposed to help the airlines work on many areas but it is nothing like having one big company that serves all market segments like SIA.

And how many more restructuring MAS needs to ensure it does not slip off route again.

We should be open about letting entrepreneurs run the show.

For a long time, MAS and Proton were two companies with big problems and were bleeding as they were seen to be “not competitive enough.''

After much resistance, the Government has finally sold Proton to DRB-Hicom, and now it is up to DRB-Hicom to prove that Proton is worthy of the purchase.

It also stops the possible public outcry that public funds are used to rescue companies.

Like it or not, Proton and MAS has to be run like private companies and those who call the shots should consider selling MAS.

Be it Fernandes or Kamarudin, they are in the business and MAS needs the “entrepreneurial push and mentality of making money.''

In the final analysis, we need a stronger and bigger Malaysian airline, not just a premium airline. That is food for thought.

* I bet all MAS employee are jst shaking their legs with nothing much work to do. I wonder do MAS payout bonuses to their employee?

Swapping of shares, it's a win-win situation for Air Asia and MAS

By The Star

AirAsia X (AAX) seems all set to start ticket sales for the much-awaited KL-Sydney route next week and will begin mounting flights to the Australian city by April this year, way ahead of rival Scoot.

The airline is also said to be in the final stages of rationalising its route network where it would cut some routes which it deemed to be unprofitable and add Sydney and some routes to China (provided it can get slots there) to its network.

“We want to do that (Sydney) well ahead of the competition,'' said a senior official of the airline group.

Scoot is Singapore Airlines' long-haul low-cost carrier that has named Sydney as the first city of call out of Singapore and plans to begin flying the route by mid-year.

The official declined to elaborate, but market has it that AAX will begin selling tickets for the sector next Tuesday and a team is planning to launch the sales from Sydney.

The first flight is slated to take off on April 1. However, all is subject to its internal planning, though the airline may be looking at daily flights for the KL-Sydney sector.

This puts an end to the near three-year wait and a bitter fight with Malaysia Airlines (MAS) over the route. MAS had previously lobbied against competition and the national carrier is still the only airline serving the KL-Sydney route after Jetstar withdrew from the sector in 2009.

This sharing of routes has been made possible after a share-swap agreement between AAX's sister company AirAsia and MAS on Aug 8 last year and both will collaborate rather than compete.

Currently, MAS flies twice daily from KL to Sydney and whether MAS will reduce the frequency to once daily and make way for AAX to take on the other slot is unclear.

“Choices and reasonable fares are what a traveller wants. But the biggest fear for travellers over the collaboration is the lack of competition and that is seen by the fare pricing for the Dehli/Mumbai sectors where the fares offered by AAX are somewhat close to that offered by MAS,'' said an industry source.

To be fair, AAX does offer reasonable rates for its Melbourne, Perth and Gold Coast flights and if the booking is made in advance, the savings can be up to 40% of the full-service fares. The airline is currently offering a 20% discount on its base fares for all its routes for a limited period.

Asked on the strategy for the KL-Sydney route, the official said:“We would offer lots of low fares and as we are already well known in Australia it should be (fairly easy to fill up our aircraft).''

Interestingly, those in the know claim that AAX is close to finalising details on whether to exit from the Indian (New Dehli, Mumbai), European (London and Paris) and Christchurch routes.

Sources said both MAS and AAX had had several meetings over the matter so that MAS could take over all the slots from AAX for the routes and carry AAX passengers that have booked seats with the airline.

The date for axing the route is said to be as early as February. AAX has, however, repeatedly said that “no decision on routes, whether to add new ones or cancel new ones'' had been made.

But those in the know claim that “all this adding and axing of routes is part of the understanding under the collaboration.'' Looking from the collaboration perspective, moving out of the European/India/Christchurch routes is seen as a compromise to get Sydney and some China routes.

MAS CEO Ahmad Jauhari Yahya in his executive summary of his business plan said that “we are close to finalising a connecting-service that will enable passengers on either airline to seamlessly connect between carriers and non-overlapping routes.”

Separately on Tuesday, AirAsia boss Tan Sri Tony Fernandes tweeted: “With all that's going on, we will need to get more planes. I will be speaking to the board. The growth in the low-cost arena is very exciting.''

Last Friday he was quoted in Paris as saying: “AirAsia will consider buying up to 25 Airbus A320 aircraft. Our growth will probably exceed the aircraft that we have right now, and the initial public offerings of AirAsia's units in Thailand and Indonesia will give us the ability to probably take more aircraft.''

*MB: Afterall the swapping of share between Air asia and MAS would be a win win situation. Closing some routes and compromising some routes between the two airlines, a total win-win that sets our airline industry even stronger in the international arena. What's the shout all about by the Union previously? Bunch of dumbnuts who cant foreseen the future.

Singapore billionaire Peter Lim

By The Star

Singapore billionaire Peter Lim, dubbed the “Remisier King”, has signed a deal with the Johor royal family to acquire 10ha in Johor for the development of a medical hub and a marina city.

The joint venture company behind the development is Best Blend Sdn Bhd, which Lim owns 70%, and the royal family owns 30%. Lim is ranked by Forbes business magazine as Singapore's eighth wealthiest individual with a fortune of S$1.8bil.

“The cost of the medical hub is estimated at S$200mil and the total development cost could range from S$1bil to S$2bil. The medical hub will be funded through a mixture of debt and equity,” said Koh Kim Huat, a director of Best Blend.

The hospital, when completed, will be managed by Thomson International Health Services, the consultancy and management division of Thomson Medical Pte Ltd.

Singapore-listed Thomson Medical was taken private by Lim last year. It is described as a leading healthcare service provider in Singapore for obstetrics, gynaecology and paediatric service.

The site of this hub is located at Bandar Johor Baru, and is within close proximity to Johor's new royal customs, immigration and quarantine complex as well as Singapore's Woodlands checkpoint.

The first phase of the project will see the construction of a medical hub which will include a private hospital and healthcare-related facilities and also supporting facilities including serviced apartments, a mega shopping mall and a mega fully secured car park. A special feature of the complex is a state-of-the-art security deterrence and detection systems.

The 200-bed general hospital will house centres of excellence for diabetes, orthopaedics, ophthalmology, women's health, and a state-of-the-art day surgery centre.

“The medical hub will provide quality private healthcare at affordable prices to Singaporeans and Malaysians,” said Koh.

When asked whether TMC Life Sciences would be involved in the medical hub, Koh said there were no plans at this point.

Lim made headlines in Malaysia last year when he bought a substantial stake in TMC Life Sciences Bhd, a private healthcare group which is popular for its fertility treatments. Lim is now the largest shareholder of TMC with 32.59% stake.

Koh said fertility would be one of the key focus segments of the hospital. Among others, the focus for the hub will be the treatment of chronic and lifestyle diseases associated with growing affluence and which afflicts increasing numbers of Malaysians. The hub aims to provide a one-stop centre for chronic disease management of diabetic patients. A training school will be set up for nurses and medical technicians.

*Medical industry is really expanding in Johor, any property which can grab nearby?

Sime partially acquired Eastern & Oriental Bhd (E&O)

By The Star

Sime has got the biggest chunk of E&O, but was the price worth it?

THE pundits have it. For the last month or so, the rumour mill was working overtime around Eastern & Oriental Bhd (E&O), the luxury lifestyle property developer, that a merger or acquisition was in the works.

First came the persistent speculation that SP Setia Bhd would merge with E&O, which was soon quashed by SP Setia. Then last week - quite out of the blue - Sime Darby Bhd announced it was acquiring a 30% stake in E&O for a significant premium over the latter's share price.

In early August, E&O's shares galloped to a three-year high of RM1.75 on the back of the SP Setia merger rumours, then came down again in line with the global stock slump. Yet, amid the broader market sell-down a few weeks later, its stock again saw aggressive trading, this time from its own shareholders who appeared to be upping their stake.

The notable ones included GK Goh Holdings Ltd, a substantial shareholder of E&O, and Datuk Azizan Abd Rahman, a director of E&O. According to shareholder changes filed with Bursa Malaysia, GK Goh had bought 1.25 million shares in three days, raising its stake to 11.6%, while Azizan acquired 100,000 shares.
The upward trend in E&O's share price can be observed since Aug 24, from RM1.43 to Friday's close of RM1.60, an 11.9% increase.

The deal with Sime Darby, which E&O called a “milestone” development, raised more than a few eyebrows about why such a high price was paid. The share sale agreement is for Sime Darby to acquire 273 million shares in E&O and 60 million irredeemable convertible secured loan stocks, representing a 30% equity interest, for RM766mil cash.

The sale price works out to RM2.30 per E&O share, which is a 58.6% premium over the stock's pre-suspension price of RM1.45. Sime Darby came out in defence of its purchase, saying the RM2.30 was actually a 20% discount to E&O's estimated realisable net asset value of RM3.2bil or RM2.88 per share.

Upon completion of the deal, slated for Sept 9, 2011, Sime Darby will be the single largest shareholder of E&O.

E&O's largest project is the 980-acre Seri Tanjung Pinang seafront development, a coveted address in Penang.

To recap, the 30% block in E&O was acquired by Sime Darby from three substantial shareholders: E&O managing director and founding member Datuk Tham Ka Hon, Tan Sri Wan Azmi Wan Hamzah and Singapore-listed GK Goh.

The trio's collective 41.7% shareholding in E&O will be diluted to 11.5% post-acquisition.

Tham, previously the largest shareholder with 15.7%, will end up with a 5.1% stake while Azmi and Goh will have 3.5% and 2.9% respectively.

A sore point with analysts is the high price paid for E&O. TA Research said the price was 19 times E&O's forecast earnings for 2012 and 1.85 times its price to book value based on consensus estimates. By comparison, the property sector has an average of 12 times forecast earnings for 2012 and 0.8 times price to book value.

Kenanga Research also noted that since Sime Darby was expected to equity account E&O's earnings on an associate level, that would only translate to a meagre 0.6% increase to Sime Darby's profits in 2012 and 2013.

It suggested that management might have been better off using the RM766mil to expand its plantation land or motor segment in China.

A local broker, however, had a more pragmatic view, saying that although Sime Darby was keen to venture into high-end development, it did not necessarily want to obtain everything at one go via a general offer, which would have been a much riskier proposition.

“Furthermore, E&O's shares in the open market are quite fragmented and not very liquid, making the task of acquiring 30% quite cumbersome and time-consuming.

“By getting the substantial shareholders to agree on a share sale proper, Sime Darby avoided facing a hostile takeover situation,” she said.

In terms of mutual benefits, Kenanga pointed out that phase two of the Seri Tanjung Pinang development might have factored strongly in the deal.

The project, estimated to have a reclamation cost of between RM3.2bil and RM3.5bil and a gross development value of RM9bil to RM10bil, could do with the financial muscle of a company like Sime Darby,

MAS, AirAsia share swap

By Jahabar Sadiq(Malaysia Insider)

The surprise share swap between Malaysia Airlines (MAS) and budget carrier AirAsia Bhd is slated to be sealed tomorrow in a deal that will allow Tan Sri Tony Fernandes to step in and pilot the ailing state-owned airline back to profitability.

The Malaysian Insider understands that the share swap will likely see a change in leadership with a new chief executive to replace Tengku Datuk Azmil Zahruddin, who took the job almost two years ago from Datuk Seri Idris Jala who is minister leading Malaysia’s economic transformation.

“There is a slew of meetings today to dot the i’s and cross the t’s but it’s done and has the blessings of Putrajaya,” a government source said, referring to the office of Prime Minister Datuk Seri Najib Razak, who is chairman of MAS’s ultimate owner, Khazanah Nasional Berhad.

Under the deal, Fernandes and his Tune Air Sdn Bhd partner Datuk Kamarudin Meranun are expected to swap a portion of their AirAsia shares for 20 per cent of Khazanah’s stake in MAS.

The state asset manager’s wholly-owned unit Penerbangan Malaysia Bhd (PMB) owns 69 per cent of MAS after the wide asset unbundling (WAU) restructuring programme carried out in 2002 by boutique consultancy BinaFikir. BinaFikir’s then boss Tan Sri Azman Mokhtar is now managing director of Khazanah.

Another BinaFikir consultant in the WAU, Mohd Rashdan Mohd Yusof, is Khazanah’s representative on the MAS board and was thought to be a potential chief operating officer after the share swap but sources say an outsider is likely to get the job.

“Most of the people in the MAS board are either bankers or accountants. What is needed is a person with airline experience,” an industry source said, pointing out that Fernandes himself is an accountant but has 10 years’ experience turning AirAsia into Asia’s largest budget carrier.

“Most of the past solutions for MAS, either the WAU or Jala’s business transformation plan, were financial in nature to keep the airline in the black. But what is needed are operational fixes,” he added.

The flag carrier recorded a first-quarter net loss of RM242.3 million against a profit of RM310.6 million in the same period a year ago. Tengku Azmil took over the reins of the company on August 28, 2009 from Jala.

Analysts expect the flag airline to make full-year operating losses for its current financial year ending December 31, in line with higher fuel costs and falling yields. Its sales director Datuk Bernard Francis recently resigned within 24 hours despite having a few more months in his contract.

MAS recently named former managing director Tan Sri Md Nor Md Yusof as its non-executive chairman from August 1, replacing long-serving chairman Tan Sri Dr Munir Majid.

Md Nor managed the airline between 2001 and 2004 where he implemented the WAU restructuring of MAS in 2002, involving uncoupling the airline’s massive debts and transferring of the MAS fleet to PMB.

Khazanah said yesterday it remain the biggest shareholder in MAS, following reports of the share swap. It did not deny the share swap but said it will make an announcement about the flag carrier’s transformation plan at an appropriate time.

“The aviation sector is a strategic sector to the economy and MAS remains a core holding in Khazanah Nasional Berhad’s portfolio. Khazanah will continue to maintain its position as the single largest shareholder in MAS,” the statement said.

Both Fernandes and Kamarudin also issued a statement denying that they will be the largest single shareholder in MAS but they did not deny news of the share swap.

The Malaysian Insider has reported that the share swap will ensure MAS reclaims its premier airline status while long-haul budget carrier AirAsia X will serve the low-cost market sector.

It will also lead to both carriers rationalising domestic routes and leave MAS subsidiary Firefly to only operate turbo-prop operations from the Skypark in Subang.

Malaysia Billionaire: Can the govt find some expertise for the stupid Proton so that it wont waste out tax payer money and impost heavy tax-duty on imported cars.