Today's market update: 2-1-13

 

 

Posted with Blogsy iPad App

Today's market update 31-12-2012

 

 

Posted with Blogsy iPad App

Australian regulator files lawsuit against AirAsia

AFP - Tuesday, January 24, 2012

SYDNEY, (AFP) - AirAsia was slapped with a lawsuit by Australian regulators accusing the Asian budget carrier of failing to disclose the full price of fares on its website.
The Malaysia-based airline, which flies international services out of Australia from the Gold Coast, Melbourne and Perth, with Sydney to be added from April, was named in documents lodged at the Federal Court in Melbourne on Tuesday.
The Australian Competition and Consumer Commission, the country's consumer watchdog, claims some fares sold on AirAsia's website do not display prices inclusive of all taxes, duties, fees and other charges.
"Businesses that choose to advertise a part of the price of a particular product or service must also prominently specify a single total price," it said in a media release.
The regulator alleged the fares relate to flights from Melbourne to cities including London, New Delhi, and Hangzhou in China, from the Gold Coast to Ho Chi Minh City and from Perth to places such as Taipei and Phuket in Thailand.
The matter is listed to be heard on March 2 with the watchdog seeking an injunction "to restrain AirAsia from engaging in misleading conduct in the future".
It also wants a court order "that AirAsia publish corrective notices on its websites regarding the conduct".
AirAsia could not immediately be reached for comment.

TNB will be back in the black in Q2: Che Khalib

Read more: http://www.btimes.com.my/articles/20120118012737/Article/

TNB made a net profit of RM716.5 million during the quarter ended November 2010. The utility blamed the shortage of gas for its loss, saying it has had to rely on more expensive oil and distillates to generate electricity. Gas makes up 60 per cent of its fuel mix followed by coal, hydro power and others. TNB president and chief executive officer Datuk Seri Che Khalib Mohamad Noh said the company is likely to record a profit in the current quarter as it will get its RM2 billion compensation or RM1 billion each from Petroliam Nasional Bhd (Petronas) and the government. "We already received RM1 billion from Petronas, which was acting on behalf of the government last December 30. We expect to receive the other RM1 billion from the government by next month. With the RM2 billion, we will definitely be profitable in the second quarter," Che Khalib told reporters at its headquarters here when announcing TNB's results. Due to gas shortage last year, TNB had to use more expensive fuel and distillates worth a total of RM3 billion, withThe government and Petronas agreed to reduce TNB's financial burden by contributing RM1 billion each to the cost. "The situation will hopefully improve by September this year when Petronas LNG (liquefied natural gas) complex in Malacca completes its upgrading works by September this year," he said. Che Khalib said TNB needs 12,500 cu m of gas a day to meet the demand for power, of which Petronas can supply 11,000 cu m as it has to distribute the gas to other industries such as rubber glove, automotive, ceramics, glass and others. To resolve the gas shortage, Che Khalib said TNB will buy gas from the open market at a competitive price from Shell, Esso and Total, reduce its gas dependency on Petronas as well as help the government trim its gas subsidies. "Buying gas from the open market will mean we have additional capex but let us resolve this first with the government which has formed a taskforce on how to address this." Preliminary talks are ongoing between TNB and taskforce members which include Petronas, Energy, Green Technology and Water Ministry, Economic Planning Unit, Finance Ministry as well as the Performance Management and Delivery Unit (Pemandu). Che Khalib declined to comment but analysts said TNB can reduce its high cost by getting a tariff hike from the government. He said the Energy Commission is also laying out its policies such as on the orderly imports of gas to avoid an industry scramble

AirAsia X's adieu may not be forever

Read More: http://www.btimes.com.my/articles/20120114015715/Article/

Considering that flights to London end in late March, Branson's skirt challenge is unlikely to happen. "At the direction oil is heading, long haul is very tough but we could probably see them revisiting the routes in the future," OSK Research analyst Ahmad Maghfur Usman told Business Times yesterday. Another analyst who declined to be named concurred, saying that the routes could be revisited when AirAsia X takes delivery of its 10 Airbus A350 XWBs between 2016 and 2018. At the signing ceremony of the aircraft order, AirAsia X chief executive officer Azran Osman-Rani had said the aircraft would allow it to operate with unprecedented unit costs for long-haul flights to Europe and North America. The A340, which is what AirAsia X is currently using for the London and Paris routes, is known to be a fuel guzzler, contributing to the losses it experienced on these routes. On Thursday, AirAsia X announced it would stop servicing London, Paris, Mumbai and New Delhi by April 2012. "The announcement definitely underscores the difficulty behind the low-cost long-haul model, but AirAsia X flying these routes again are within the realm of possibility," said Standard and Poor's senior aviation analyst Shukor Yusof. Analysts are in agreement that the suspension of its lossmaking routes will make the initial public offering (IPO) for AirAsia X a more attractive one to investors. "AirAsia X is likely to be able to achieve an IPO in 2013," Maghfur said. The 2013 deadline is considered more doable as it would give AirAsia X an opportunity to clean up the red ink in its books. "Of course that is barring any pressing need for cash or to exit the company by its shareholders,"one analyst said.

AirAsia X to withdraw flights to four cities

Read more: http://www.btimes.com.my/articles/20120113003049/Article/

The long-haul budget carrier yesterday announced that it would be withdrawing its services to Mumbai by next month, while flights to New Delhi, London and Paris will all stop in late March. The announcement confirms a Business Times report last month that AirAsia X had written to the Transport Ministry of its intention to withdraw from London, Paris, Mumbai and Delhi. According to sources as of October last year, all four routes have been running losses. The Kuala Lumpur-London route lost RM56.9 million, KL-Paris RM43.5 million, the KL-Delhi RM29.1 million and the KL-Mumbai route RM21.3 million since it started. According to media reports, the route cuts announced are by no means all that can be expected from AirAsia X. Its KL-Christchurch route is also under review. It is understood that these initiatives are part of a plan to limit the flying radius of the long-haul budget airline to below 10 hours. This change in business model is deemed especially necessary with the expected entry of Singapore Airlines' long-haul low-cost budget carrier, Scoot, by the middle of this year. Scoot has stated its intention to fly to destinations that are five to 10 hours from its base at Singapore's Changi International Airport. "We intend to concentrate capacity in our core markets of Australasia, China, Taiwan, Japan and South Korea, where we have built stable, profitable routes within an infrastructure that supports low-cost services," AirAsia X chief executive officer Azran Osman-Rani said in the statement. "We intend to open new routes within these markets, as well as add frequencies on existing routes. Announcements of our future expansion plans will be made soon." All passengers affected by the route cuts will be given the option of either flying on an alternative airline, obtain a full refund or be re-routed to another AirAsia X destination. It is understood that passengers opting for an alternative airline will be transferred to Malaysia Airlines.

‘Petronas in petrochem plant talks with oil majors’

Read More: http://www.btimes.com.my/articles/20111223231344/Article/

Kuala Lumpur: Petronas is in talks with several global oil majors including Shell and Exxon Mobil to develop petrochemical plants within its US$20 billion (RM63.4 billion) refinery complex in southern Malaysia, two sources with direct knowledge of the matter said. Malaysia's national oil company is also talking to Japanese firms Itochu Corp and Mitsubishi Corp as well as to Dow Chemical Co and; the largest US chemical maker and as it seeks to tap surging Asian demand and diversify its earnings, the sources said. Petronas is expected to make a decision on the partnerships by mid-2012, which signals it is quickly moving beyond the feasibility stage of the project. "Petronas is getting a lot of interest for the joint-venture undertakings," said one source who declined to be identified as the talks are ongoing. "They have moved to the basic engineering and design stage and after this the tendering process for building the complex will start," the source added. Petronas, Shell and Mitsubishi officials in Malaysia declined to comment. Itochu, Dow Chemical and Exxon Mobil were not immediately available to comment. Petronas first unveiled the Refinery and Petrochemicals Integrated Development (RAPID) project in May and has said the complex will be commissioned by end-2016, which both sources said was on track. The US$20 billion complex is to be built in Johor which borders Singapore and#8211; the largest oil trading hub in Asia. The project is key to Petronas' plan to join the likes of India's Reliance Industries in grabbing a larger share in the US$395 billion (RM1.26 trillion) global market for specialty chemicals and high value raw materials used in products from diapers to higher performance tyres and LCD televisions. "In terms of markets for petrochemicals coming from RAPID, Petronas is aiming for Myanmar, Bangladesh and parts of the subcontinent," said a second source. "The potential is there as these are huge markets or in the case of Myanmar, just opening up." The RAPID project will include a 300,000 barrel-per-day refinery that produces naphtha, gasoline, jet fuel, diesel and fuel oil. The first source said the crude feedstock would come mostly from Petronas' equity projects in Sudan, Chad and eventually Venezuela instead of Malaysia's own higher quality and expensive crude, domestic production of which is slowing. The crude feedstock from Petronas equity projects will also be channeled into the petrochemicals and polymer complex, including a three million tonne-per-year (tpy) naphtha cracker and petrochemical derivatives facility focusing on synthetic rubber. "Over 1 million tonnes will be for ethylene and propylene and the rest for high grade specialty chemicals," said the first source. "Synthetic rubber is a big thing. Nearly 90 per cent of a tyre is made of synthetic rubber because natural rubber production is declining in Asia, so there is an opportunity for Petronas," the source added. The RAPID project gives Petronas' downstream operations a better chance of staying afloat in times of economic downturns and poor margins as it allows Malaysia's only Fortune 500 company to tap into its global feedstock sources, analysts say. Industry players have said Malaysia and Petronas' ramp-up of oil infrastructure in the southernmost tip of the country will create a "Greater Singapore" trading hub that allows the region to keep up with competitors like China. Petronas is counting on interest from Japanese firms which are looking to relocate their plants or re-invest outside their home base after the March tsunami and earthquake triggered uncertainty over future energy supply, the second source said. "The interest has particularly been strong from the usual Japanese players in the petrochemical market. This project has started at the right time," the source added. Reuters

The downstream push for Petronas

Petroliam Nasional Bhd plans to grow its downstream business by
banking on lucrative specialty chemicals and an aggressive international expansion.

Read more: The downstream push for Petronas http://www.btimes.com.my/articles/20111205000709/Article/#ixzz1fd2m2ABi

This will be driven by Asia, which is growing faster than the rest of the world, supported by a rising middle class. Better demand for cars, plastics, perfume and even diapers will be good news for Petronas. The national oil company also refines oil into petrol, operates petrol stations, and produces petrochemicals. "This is a margin business. It's always cyclical. For us, it's important to be above water at the downcycle and to really make money at the upcycle. That is the nature of the business," said Datuk Wan Zulkiflee Wan Ariffin, the executive vice-president of the downstream business. For the year to March 31, 2011, the downstream business reported a net operating profit after tax (NOPAT) of RM7.2 billion, a 50 per cent jump from a year earlier. This was on the back of RM130 billion revenue, which also rose 13 per cent. Wan Zulkiflee thinks the downstream business should report better profits in 2012 as the industry is still in an upcycle, until about 2015. "We are catching the trend, especially in Asia Pacific where the demand growth is about 5.3 per cent for chemicals in general. "We are targeting markets like India, for example, where plastic consumption per capita is 7kg. In the West, it's 24kg per capita. The potential growth is in China and India. Some 18 million new cars are sold in China every year," he said. Interestingly, alalthough the business makes up almost half of the Petronas group revenue, it is the smallest profit contributor. The biggest money maker for Petronas is its upstream division, which looks for oil and gas. That business provided RM93.3 billion in gross revenue in 2011 but made RM34 billion in gross NOPAT. That is almost two-thirds of the total gross NOPAT. This is followed by the gas and power business, with RM11.2 billion, or 21 per cent of the total. However, this was not how the downstream business should be viewed, Wan Zulkiflee said. "The upstream return is quite high, for gas almost as high. For downstream, it's a margin business. The idiosyncracies are different. The playing field is also different. What's important for Petronas is to maximise the value chain," he said. The downstream division will also be very busy with the RM60 billion refinery and petrochemicals integrated development project, or RAPID, in southern Johor, set to come online in 2016. As for its downstream marketing segment, it wants Petronas Dagangan Bhd to expand further abroad and boost its lubricant business to be among the top five in the world by 2016.

MASkargo CEO on leave amid domestic probe

While details of the inquiry are sketchy, sources say managing director Shahari Sulaiman has been away since early November 2011.

Read more: MASkargo CEO on leave amid domestic probe http://www.btimes.com.my/articles/20111203005922/Article/#ixzz1fQsKkJLT

Malaysia Airlines Cargo Sdn Bhd (MASkargo)'s managing director Shahari Sulaiman has gone on leave amid a domestic inquiry. While details of the inquiry are sketchy, sources say Shahari has been away since early November 2011. It is unclear if he will be reporting back for duty any time soon. It is understood that investigations started as early as August this year and a domestic inquiry was done. The outcome is not known. Just before November, however, fresh allegations were brought up, which led to Shahari going on a leave of absence. Parent company Malaysia Airlines neither denied nor confirmed the news. "Encik Shahari Sulaiman, managing director of Malaysia Airlines subsidiary MASkargo, is currently on leave. "In his absence Encik Mohd Yunus Idris, senior vice president Global Sales and Government Affairs MASkargo, is overseeing the daily operations of the subsidiary," it said in response to queries on the matter. Attempts to contact Shahari were unsuccessful. The head of MAS' continuously profitable air cargo division, Shahari was named managing director in September 1 2007 replacing Datuk Ong Jyh Jong. Prior to that, Shahari was the general manager of cargo operations for MASkargo. Under Shahari's stewardship, MASkargo won the Best Air Cargo Carrier in Asia title at the 23rd annual Asian Freight and Supply Chain Awards 2009 in Hong Kong. Shahari also initiated the upgrading of the Material Handling Cargo System used in the warehouse complex in Kuala Lumpur International Airport, to ensure smoother handling of cargo and an increase in capacity from 650,000 tonnes to one million tonnes per annum. MASkargo made a record pre-tax profit of RM142 million in 2010.

Petronas on track to beat full-year target after strong Q2

Petroliam Nasional Bhd made better quarterly profits mainly on stronger oil prices and is optimistic of beating its earlier full-year pre-tax profit target of RM60 billion.

Read more: Petronas on track to beat full-year target after strong Q2 http://www.btimes.com.my/articles/20111201233522/Article/#ixzz1fQqPkyLR

It is confident of making at least RM70 billion this year, which has been shortened to just nine months, as it will be changing the end of its financial year to December 31 from March 31. President and chief executive officer Datuk Shamsul Azhar Abbas said Petronas' profit has already reached some RM57 billion in the first six months that ended on September 30. "Given the current trend, I see no problem of the company surpassing the initial target," he told a briefing here yesterday. For the second quarter ended September 30 2011, Petronas made a profit of RM18.3 billion on revenue of RM71.8 billion compared with RM11.9 billion and RM56.9 billion, respectively, over the same period last year. Its six-month revenue jumped by a quarter to RM144.8 billion on higher realised prices of petroleum products, crude oil and condensates, liquified natural gas and petrochemical products. Shamsul Abbas warned that the oil and gas industry will not be spared from the global economic uncertainty due to the eurozone sovereign debt crisis concerns and continuing geopolitical risks from the Middle East and North Africa. Already, oil prices have fallen in the current quarter from the second quarter on prolonged concerns over Europe and the US economy. He expects crude oil prices to hover between US$85 (RM268) and US$87 (RM274) per barrel next year. Meanwhile, the group plans to expand its power business in Japan and India, said Datuk Anuar Ahmad, executive vice-president for gas and power business. "We started with Singapore and also looking for Malaysian project in Johor and going to focus on the Asia-Pacific region, including India," he added. Petronas executive vice-president for exploration and production Datuk Wee Yiaw Hin also did not rule out plans to bid for new projects in Myanmar. "Yes, at the moment in Myanmar, we are only in the offshore and business is quite good. We will jointly bid for the onshore fields with our existing partners in Myanmar." Shamsul Abbas said Petronas will contribute RM1 billion to the National Trust Fund this year. "For the last 16 years, we have been contributing RM100 million a year. But with the results we have achieved over and above our expectations, we have decided to contribute RM1 billion a year," he said. The fund is used to conserve and restore what is considered as national heritage.

Sime's Q1 net surges 64pc to RM1.07b

Net profit leaped to RM1.07 billion in the quarter ended September 30 against RM654.7 million in the same period last year, mainly thanks to higher crude palm oil prices

Read more: Sime's Q1 net surges 64pc to RM1.07b http://www.btimes.com.my/articles/20111126002034/Article/#ixzz1epCe4u5T

Kuala Lumpur: Sime Darby Bhd, the world's biggest publicly-traded palm oil producer, registered a 64 per cent jump in its first-quarter net profit, mainly thanks to higher crude palm oil (CPO) prices as well as demand for its heavy equipment. Net profit leaped to RM1.07 billion in the quarter ended September 30 against RM654.7 million in the same period last year. Revenue increased by 28 per cent to RM11.1 billion. Sime Darby expects a lower net profit for the year ending June 30 2012, due mainly to possible softening of CPO prices. In its target headline key performance indicators (KPIs) for the current financial year, it expects net profit to be around RM3.3 billion. Based on analysts' earnings estimates by Bloomberg, Sime Darby is expected to post a net profit of about RM3.8 billion for the full year, an increase of 3.8 per cent against RM3.66 billion posted during the 2011 financial year. Sime Darby said the KPIs were also based on the assumption that CPO prices would be slightly below the RM2,800 level."When we talk about forecasting, it is always better to be conservative ... In our business, weather plays a key role in determining the prices of commodities. "Nevertheless, we have more than seven months to go. We will be happy if the price stayed above RM3,000 a tonne. It's a bonus," said president and group chief executive Datuk Mohd Bakke Salleh. During the quarter, the average CPO prices were at RM2,946 per tonne, against RM2,511 per tonne in the same quarter last year. There was also an increase of fresh fruit bunches (FFB) by over eight per cent. Sime Darby's industrial segment posted an operating pro-fit of RM330 million in the first quarter, up 42 per cent from a year earlier, boosted by its strong mining business in Australia. The Malaysian operations were supported by its construction and logging businesses. The group's property and automotive segments' operating profits grew three per cent and 2 per cent to RM60.5 million and RM154.7 million respectively. Operating profit from its energy and utility unit fell six per cent to RM47.3 million, due partly to power plant downtime in Thailand. Its healthcare and other units' operating profit registered 38 per cent growth to RM11.9 million, partly due to higher profit contribution from its investment in Tesco.

Airport tax saga continues

AirAsia Bhd has backtracked on an earlier statement which stressed it will not adhere to Malaysia Airports Holdings Bhd (MAHB)’s recent airport tax hike.

Read more: Airport tax saga continues http://www.btimes.com.my/articles/20111124233404/Article/#ixzz1ee0vVQk4

A post on its official Facebook fan page late yesterday morning said AirAsia would not adhere to the increase in airport tax, which will be implemented on November 25 2011. The statement was even tweeted out to its followers on social network Twitter. The post was in reference to MAHB's plans to increase airport tax for international passengers at the low-cost carrier terminal (LCCT) to RM32 from RM25 previously. A check on AirAsia's Facebook fan page later in the afternoon, however, showed that the post had been changed to read that the airline will continue to lobby for no hike in airport tax at the LCCT, with the public's support. "Look at the queue at the immigration, space for check-in counters, quality of toilets, cleanliness of the facilities and#8211; is it really worth the increase?" AirAsia's head of commercial Jasmine Lee asked in the post. Not adhering to the airport tax hike at this stage, when it has been approved by the Government,would mean that AirAsia needs to apply to the Ministry of Transport to stop collecting airport tax on behalf of airport operator MAHB. AirAsia's Tan Sri Tony Fernandes did not respond to SMSes on the matter. It is unclear if the post was the work of an overzealous employee or part of an initiative by AirAsia in its fight against the hike. Fernandes has publicly criticised both MAHB and the Ministry of Transport for the increase. Last week, AirAsia's co-founder took to twitter to vent his frustration.

Give us a fair hearing, Fernandes tells ministry

AirAsia CEO contends that for the benefit of Malaysia there must either be a ministry that looks after the interests of the country, or an independent regulator like Bank Negara Malaysia.

Read more: Give us a fair hearing, Fernandes tells ministry http://www.btimes.com.my/articles/20111121001244/Article/#ixzz1eHgVfhfa

Kuala Lumpur: AirAsia Bhd co-founder and Malaysia Airlines shareholder Tan Sri Tony Fernandes has called for a more objective Transport Ministry, saying that airlines are not given a fair hearing. "The secretary-general of Transport Ministry sits on the board of Malaysia Airports Holdings Bhd (MAHB) and at meetings take the side of the airport operator, how is that fair?" he told Business Times via telephone last Friday. Fernandes contends that for the benefit of Malaysia there must either be a ministry that looks after the interests of the country, or an independent regulator like Bank Negara Malaysia. He said the recent increase in passenger service charges (PSC) was an example of MOT (Ministry of Transport) not giving airlines a proper hearing. According to Fernandes, during the course of the second review on the PSC increment, AirAsia was given an hour to plead its case. international PSC was initially to be implemented on September 15. This was postponed however, pending another review when airlines cried foul. "My efforts are to ensure that airlines grow and for Malaysia to grow along. The government spent about RM300 million on the current low-cost carrier terminal (LCCT) and they managed to recoup its investments in a year. That must be a record of some sort," Fernandes said. He also said the LCCT was not subject to a subsidy from the government. "The government only subsidised KLIA if PSC didn't go up there, not in LCCT," Fernandes said. He was responding to Transport Minister Datuk Seri Kong Cho Ha's comments last Thursday which criticised him for questioning the government's recent rise in international PSC. He also derided AirAsia on its own multi-layered charges, saying that the airline increases charges "quietly". Fernandes' response was that its charges are optional. "Why should the guy who does not check in baggage have to pay the same as another that has excess? Credit card inter-change fees are high, make a direct debit payment and there is no fee," he said. AirAsia charges include a convenience fee for paying via credit card and a fee for checking in over-the-counter. "How can you justify an increase (in PSC) with such poor facilities in the LCCT? Ultimately, passengers will decide if the increase in PSC is fair," he said. In May 2007, the country's two LCCTs saw its PSC reduced to RM6 for domestic flights and RM25 for international ones. A rise in charges on November 15 will see international PSC go up to RM32.

Transport ministry strikes back at Fernandes

The Transport Ministry is incensed by Tony Fernandes’ tweets which criticised Malaysia Airports and the government for raising passenger service charges for international travellers from November 15.

Read more: Transport ministry strikes back at Fernandes http://www.btimes.com.my/articles/20111118000426/Article/#ixzz1eHbViTKx

Pangkor Island The Transport Ministry has struck back at Tan Sri Tony Fernandes for his critical remarks on passenger service charge increase by the government and Malaysia Airports Holdings Bhd (MAHB). "When you point the finger at one person, three fingers point back at yourself," Transport Minister Datuk Seri Kong Cho Ha said, referring to Fernandes. He was speaking after the reactivation of scheduled flight services into Pangkor Island by Berjaya Air yesterday. Kong was incensed by Fernandes' tweets recently which criticised MAHB and the government for increasing passenger service charges (PSC) for international travellers from November 15. International PSC is now RM32 for low-cost terminals and RM65 for all other international airports. According to Kong, the Treasury has been paying RM180 million a year to subsidise the PSC increase which had been approved in 2009. This is in accordance with an agreement effected between MAHB and the government then, which states that the government compensate for any shortfall in charges that the government did not want passed on to passengers. "There were other increases that were done quietly by airlines ... I won't mention which airline. Baggage charges, golf bags, buy ticket using Visa card or credit card, even when checking in by counter ... why nobody complain?" Kong asked. The MOT also has no plans to change a directive which designates Sultan Abdul Aziz Shah Airport (Subang airport) as a turboprop and private jet area, restricting scheduled jet operations. Fernandes recently revealed plans to start a super-premium airline out of Subang airport which had raised the question of whether the MOT would consider changing the status of the airport to allow it to operate from there. The ministry confirmed that it has yet to receive any application for such an airline by Fernandes. "We will make a stand when we receive the application. There is no application, so there is no stand," Kong said.

Fernandes tweets his ire over host of issues

In a series of tweets, AirAsia CEO Tan Sri Tony Fernandes raised questions on MAHB’s operations, the effectiveness of members of parliament and the objectivity of the Transport Ministry

Read more: Fernandes tweets his ire over host of issues http://www.btimes.com.my/articles/20111115232457/Article/#ixzz1eHaZNCvr

KUALA LUMPUR: AirAsia Bhd may have called off a press conference yesterday on Malaysia Airports Holding Bhd's (MAHB) airport tax hike but that didn't stop its co-founder from taking to Twitter to vent his frustration. In a series of tweets which started in the morning, Tan Sri Tony Fernandes raised questions on MAHB's operations, the effectiveness of members of parliament (MPs) and the objectivity of the Ministry of Transport (MOT). Fernandes also questioned the need for a third runway in Kuala Lumpur International Airport (KLIA) when there are ways to increase utilisation of existing runways. "Why is KLIA building a third runway when they don't use dual mode on two runways? Heathrow has 60 million passengers with two runways. Fix the air traffic system MAHB. Would have been cheaper than building another runway," he said. Fernandes questioned why MPs, who had criticised him, have not questioned the cost of airports and fought for lower taxes for the rakyat. MOT was also not spared, as Fernandes put to task its role in regulating airports. "The (secretary-general Datuk) Long See Wool of Ministry of Transport sits on the Malaysia Airports board. How can he be objective and play fair to the airlines?" he asked. Fernandes' rant was triggered by the hike in airport tax, landing and parking charges which took effect yesterday. Last month, MAHB announced that MOT had approved a RM14 increase in airport tax for international passengers to RM65 per passenger for most of its international airports. The low-cost carrier terminal in KLIA and Terminal 2 in Kota Kinabalu saw charges go up by RM7 per international passenger to RM32. Landing and parking charges will rise in three stages over three years. Landing charges will be nine per cent higher and parking charges will be increased by 18 per cent a year.

Super-premium airline ‘is an idea '

AirAsia Bhd co-founder and group chief executive officer Tan Sri Tony Fernandes has downplayed plans to set up a super-premium airline as “just an idea”.

Read more: Super-premium airline ‘is an idea ' http://www.btimes.com.my/articles/20111115004902/Article/#ixzz1eHaEZh9b

"What I can say is if an idea like this dare materialise, and I'm not saying it will ... it would definitely involve MAS," Fernandes said at the launch of the airline's loyalty programme BIG yesterday. Minutes earlier, Fernandes said the article in a local daily which reported on the venture was "totally wrong". He declined to comment on specifics of the article. News of Fernandes' plans to have a superpremium airline which would operate out of Subang airport went viral last week after a local newspaper, quoting sources, revealed details of the venture. According to sources who spoke to Business Times, the venture is more than just an idea as initial steps to approach both the Department of Civil Aviation and Skypark Subang have been taken. Malaysia Airlines also came out with a statement yesterday in response to reports of its possible involvement in the project. "We wish to clarify that at Malaysia Airlines, we will evaluate all proposals and decide appropriately only if it makes commercial sense to us," the national carrier said in its statement. When questioned on the existence of the company Caterham Jet Malaysia Sdn Bhd, Fernandes dismissed it, saying that it is one of hundreds of companies he and his partners have set up. "Because we have so many problems with names (we've registered) everything ... there's Caterham jet, Caterham hotel, Lotus this..., Lotus everything," he said. A quick check with the Companies Commission Malaysia show three companies registered with the Caterham name. Caterham Automobile (Malaysia) Sdn Bhd, Caterham Sports Cars (M) Sdn Bhd and CaterhamJet Malaysia Sdn Bhd. CaterhamJet was the latest addition, registered just over a month ago. Fernandes called the idea of a super-premium business airline a wonderful opportunity for people who don't want to queue and want a different experience, a private jet experience and can pay for it. "But it's an idea, whether we can make it work or not, who knows," he said. Meanwhile, AirAsia expects its loyalty programme, BIG, to generate RM500 million additional sales for the airline in 2012. Fernandes said the airline expects to double its loyalty card with prepaid cards in all of the markets by the first quarter of 2012. AirAsia has affiliates in Indonesia, Thailand, the Philippines and Japan. Currently, only the Malaysian market loyalty card is attached to a prepaid card. Since its soft launch a month ago, some 65,000 customers from 115 countries have applied for their cards. The phasing out of the Tune Money VISA card will see another 40,000 cardholders migrating to the BIG card.

Firefly jets to be absorbed into MAS fleet?

Firefly will cease all jet operations by year-end, according to sources.

Read more: Firefly jets to be absorbed into MAS fleet? http://www.btimes.com.my/articles/paj3/Article/#ixzz1a7JZ8ldO

It is understood its turboprop operations, which is what the airline started with, out of Subang, will continue until further notice. Firefly has a fleet of eight jet aircraft, six Boeing 737-800s and two Boeing 737-400s. The B737-800s were based in Kuala Lumpur and Kota Kinabalu while the B737-400s were in Johor Baru. It is understood that the jets will then be absorbed into Malaysia Airlines' fleet. Malaysia Airlines and Firefly have been conspicuously silent since the announcement of its plans to re-brand Firefly into a regional premium full-service carrier. This has not stopped the low-cost carrier, however, from winding down its jet operations, in some cases axing routes without prior notice. According to postings on Firefly's Facebook page, the airline has stopped flights from Johor Baru to Bandung and Johor Baru to Surabaya. "Dear (passenger), we would like to advise you that we have not stopped operations for all our East Malaysian routes out of Kuala Lumpur at present. Due to the recent business realignment exercise by our parent company, Malaysia Airlines, we have stopped sales for certain routes only. Flights from KL to Kuching are operating as usual at present," Firefly's social media team said in response to a query by a passenger yesterday. The budget carrier used to fly seven times a day from Kuala Lumpur to Kuching. Checks showed that flights are down to four now. Calls to Firefly's corporate communication team went unanswered. Disgruntled passengers have taken to Firefly's Facebook page to vent their frustrations, asking for refunds for cancelled flights and more information on future flight schedules.

Details of business plan out next month

Kuala Lumpur: Details on how Malaysian Airline System Bhd (MAS) and AirAsia Bhd can work together to boost revenue, cut costs and create new business opportunities are likely to be revealed next month, said Tan Sri Tony Fernandes.

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"A lot of it is subject to legal requirements in terms of anti-competitiveness, and so that has to be cleared by lawyers. But I would imagine within the next month or so," Fernandes, AirAsia's chief executive officer, told reporters when asked when more details on the two airlines' collaboration would be unveiled. Fernandes was speaking on the sidelines of the Khazanah Megatrends Forum here yesterday. The major shareholders of MAS and AirAsia last month agreed to a share swap deal in a bid to collaborate as competition in the airline industry heats up. The two can collaborate in areas such as training, cargo, sales and distribution, maintenance, repair and overhaul (MRO), catering and logistics, Fernandes said. "If you put the volumes of MAS and AirAsia together, it becomes a mega MRO that, in partnership with someone else, could become a real competitor to Singapore's MRO. I think in the next few months you'll see some very exciting announcements," he remarked. Pitting the academies of MAS and AirAsia together could also create one of the world's biggest training academies amid a surge in demand for pilots, he noted. "Malaysia could become the biggest trainer of pilots in Asia, if not the world, when you put the strengths of MAS and AirAsia academies together. Both airlines have had excellent records of pilot quality, engineering quality ... so this could be a hub," he said. The two airlines could also cut costs in terms of catering. "We don't use LSG, but maybe together we can get a much better deal from LSG and better quality," he said. He was referring to LSG Sky Chef, MAS' caterer. Fernandes said he was optimistic on the MAS-AirAsia collaboration and urged sceptics to give them time to flourish. "The energy between the two airlines is something I never believed I'd see. It's fantastic. "I think we're going to give a lot of airlines a run for their money," he said. The share swap deal will see MAS' biggest shareholder Khazanah Nasional Bhd taking up a 10 per cent stake in AirAsia, and Tune Air Sdn Bhd - the investment arm of Fernandes and Datuk Kamarudin Meranun - getting a 20.5 per cent stake in MAS. On the stock market yesterday, MAS shed 3 sen to RM1.28, while AirAsia eased 6 sen to RM2.76.

MISC to proceed with capex plan

MISC has 14 newbuilds on order for the next two years for its petroleum shipping division.

Read more: MISC to proceed with capex plan http://www.btimes.com.my/articles/pmis-2/Article/#ixzz1YsSdvBva

Kuala Lumpur: MISC Bhd, the world's largest owner and operator of liquefied natural gas (LNG), will proceed with its committed capital expenditure of between RM4 billion and RM5 billion in mainly new vessels for the next two to three years despite the signs of a prolonged economic downturn. "We are not the sort of company that will not take deliveries (of committed programmes). Capital expenditure plans on new (intended) programmes, however, like clean petroleum production freight, have been deferred," MISC's president and chief executive officer Datuk Nasarudin Md Idris told reporters after the company's annual general meeting yesterday. According to its annual report, MISC has 14 newbuilds on order for the next two years for its petroleum shipping division. MISC recently saw both Standard and Poor's and Moody's rating agencies downgrade its debt paper ratings on concerns of continued operating losses in its petroleum, chemical and liner businesses and large capital expenditure plans. "It didn't come to us as a surprise, but what is important to note is that we are still investment grade. The strong support from Petronas gives us a much better position compared to other players in this space. Obviously, the downgrade will have an impact on our capability to raise funds in the future," MISC chairman Datuk George Manharlal Ratilal said. The company has over RM3 billion of cash, according to Ratilal. It also has a few unutilised credit lines to draw down from. MISC expects its petroleum, chemical and liner shipping divisions to continue to suffer losses this year, but is hopeful that its other divisions, mainly LNG shipping, tank terminal and offshore business, will help cushion the effects of it. "As we speak, we are working very hard to plug those losses... in its good times a very large crude carrier was earning US$200,000 (RM623, 000) a day, but today it is earning less than US$20,000 (RM63,000) a day. That's how the market has turned," Nasarudin said. On reports that MISC's subsidiary, Malaysia Marine and Heavy Engineering Holdings Bhd (MMHE), plans to lease out newly acquired Pasir Gudang fabrication yard to a third party, Nasarudin said there were no such plans. MMHE is awaiting full possession of the yard from Sime Darby Engineering Sdn Bhd, which is still in use by the company to complete contracts to customers before handing it over to MISC. MISC is hopeful that the yard will be handed over by March 2012.