Is AirAsia behaving like a spolit child?

People like me support AirAsia when it started out to give us lower fares for the long-protected Singapore-KL route several years ago.
Fares that once cost S$400 or RM800 return, have now been halved - if one were to book about 2weeks before the actual journeys.
I wrote about this a couple'a weeks back here.

Since then we have Jetstar (Qantas) and Tiger (SIA) from Singapore, and Firefly (MAS) from Malaysia also offering lower costs flights Sing-KL.
All well and good.

But today, look! AirAsia is again playing the role of the spoilt child.
It seems to be pushing people around to get what it wants.
It got badly bruised for the ill-conceived (let me just call it stupid and egoistic) plan to build an airport to actually rival KLIA, at Labu in Negeri Sembilan.
All in the name of competition, lowering costs for users etc.

I called it Airport Labu Labi. Hahaha. Kerja bodoh nak menjahamkan negara sendiri dengan menggunakan nama rakyat.
Everybody condemned it, including Dr M. And myself, egs here, here and here.
They got hit on the nose and go-stan.


And we of course remember that AirAsia at one time agreed to fly rural routes in Sabah and Sarawak, but suddenly - less than a year after doing so - passed these back to MAS after finding them not profitable.
Not unexpectedly, someone in government quickly approved it (during Pak Lah's time). See how AirAsia nicely explained it all away - the money-losing routes, taxpayers please take over.
"On 26 April 2007, the government has announced for Malaysia Airlines to take over the operation of rural air services from FAX and gave assurance that any loss will be borne by government."

I was shocked. But like every other shocking issue in Malaysia, everyone moves on quickly. Semua orang mudah lupa.


NOW, they are at it again.
I have been watching closely AirAsia X's push to muscle into MAS's territory.
Two weeks ago, when PM Najib Razak was away in Washington, suddenly AirAsia seemed to have leaked news that it has received go-ahead to fly KL-Seoul.
Eh, tak ada government announcement pun!

If you read the news reports here and here, there was not a single government official talking. Just like magic: Hey, we've got it, thank you people.
X's argument: If we didn't get Seoul and Sydney, we will be screwed because we are buying big air planes already. To me, it is obviously a bad idea to plan big when you wanna screw other people who might not like to be screwed and would fight back, like the incumbent national airline MAS.

X is saying it MUST HAVE Seoul and Sydney routes because the planes have been ordered. So please everybody, kowtow to them and say Yes.
Ini bukan zaman PakLah, when you have special ears to get things done your way.

AirAsia and its international sister AirAsia X are very good at playing this media game and using the rakyat's name to get what they wanted.
I apologise for being blunt.
Today, X's boss gave an interview to Insider to - again, using the rakyat's name and competition - get the Sydney route. See here.

Ong Tee Keat (half-out-the-door) Transport Minister, chided X and its elder sister.
Why?
Tee Keat didn't say it clearly. So let me tell you Singapore's experience.



IMPORTANT FOR MALAYSIAN TAXPAYERS


Singapore has only one national airline, SIA.
It controls SilkAir and has a stake in Tiger (34.4 per cent)

But you don't find the smaller sisters killing the elder sibling by asking to fly into the same routes.
SIA's brand is to fly into the capitals and big cities.
The rest do the other routes.
If you want to come in, open up other routes, brader.
If big sis already flies to Seoul, you ask to fly to Busan or other cities in Korea.
If big sis got routes to Sydney and Perth, you ask to fly other routes in Australia lah.

When Tiger and SilkAir fly into KL and Penang, SIA has to scale back - due to the nature of the limited awarding of landing rights. But these are no more the main routes for SIA, anyway.
If you ask a country for a certain number of landing rights a week, you got to reciprocate with a certain number for them to fly into your country.
The rights are not an infinite number.
Everybody knows SIA as the national airline of Singapore.

X now seems to want to be the SECOND national airline for Malaysia.
This will erode MAS's standing as the national airline and weaken its brand, I feel.
Does a small country like Malaysia need a second national airline that is controlled by private shareholders (not taxpayers)?
Unlike MAS, AirAsia and X profits will go to its shareholders' pockets only.
MAS, owned by government through Khazanah Nasional, will make profit for taxpayers. You and I.

X's argument is valid: Fares will become cheaper for the rakyat!
The part it did NOT say is this: MAS is a national carrier, still majority-owned by the government, ie taxpayers.
If say 10,000 people fly that route, say Sydney, a week, that is MAS's profit.  Taxpayers untung besar.
But if X goes into the same route, and lower costs, it might get a few thousand more people to fly, but it will also eat deeply into MAS profits and passengers.

Open competition is good, but as Tee Keat alludes, you got to protect your national interest in certain areas, not the interest of private shareholders.

Just like the Labu Labi idea. National interest should come first.

LET's put it another way: Petronas carries the Malaysian flag in the energy market globally, when it comes to drilling and branding overseas.
But even if other local champions, eg Petra or Crest, want to muscle in by bidding for oilfields overseas, that is not so bad.
And then we have banking, where, for example, Maybank and CIMB both have banking units in Singapore and in Indonesia.

But the airline business is a different kettle of fish.
Landing rights given by one country to another are limited.
Petronas and Crest might both come into a country and open up its businesses without much restrictions (especially in a market-driven place like Singapore).
And Maybank and CIMB can both have Indonesian bank stakes because there is no limit to their presence (subject to some Bank Indonesia rules), unlike the dishing out of landing rights.


IN POLITICAL TERMS

Whether you are from BN or Pakatan, everyone wants to see healthy finances from the national airline. MAS went through a bad patch for long years and now has been on the mend.
Whether BN remains in power or Pakatan takes over in 2013, or a mixed equation of any sort, surely no one wants a financially-bleeding government-controlled company at a time when the budget deficit is already so high.


Finally, do not think for one moment that I have become an AirAsia hater and a MAS lover. Readers of this blog might remember that I basuh MAS cukup-cukup just months ago for running a poor service out of India.
And believe me, without Tony Fernandes, MAS would be fully asleep and comfy in its Sing-KL routes.
Hail to AA, X and Tony.

But I feel there is something that is not quite right here.
Well, I can still change my mind! So, tell me.