Thursday, April 26, 2007

FAX to Give Rural Air Services back to MAS

It has come a full circle – the rural air services will be taken from Fly Asian Xpress (FAX) and handed back to Malaysia Airlines (MAS).

Transport Minister Datuk Seri Chan Kong Choy, who announced this Cabinet decision yesterday, gave assurances that it would not affect MAS’ turnaround plan.

“We have gone through the proposal and recommended to the Cabinet that MAS via its subsidiary Firefly be appointed to take over the rural air services.

“We also agreed that the provision of such services is the Government’s responsibility and a type of social service so we will continue subsidising the cost of running these operations, which amount to RM60mil per year, to maintain the low-fare structure.

“Officers from both my ministry and the Finance Ministry will go through all the details of the subsidy,” Chan told reporters at his office.

It has been less than a year since MAS handed over the rural air services to AirAsia, which then subcontracted them to FAX.

Earlier this month, FAX shareholder Datuk Tony Fernandes proposed that Firefly take over the operations of all rural air services, citing it as the “logical thing to do”.

Fernandes said FAX would be launching AirAsia Long Haul operations soon, and that it would be too distracting to operate turbo-propeller aircraft as well.

On Tuesday, MAS managing director Idris Jala said it would consider taking back the service if it did not jeopardise the national carrier’s turnaround plan.

“To be fair to MAS, as a public listed company, the proposal will be brought to its board for consideration. However, I have already spoken to MAS’ top management and they are prepared to look into it.

“But this is the Government’s decision. The takeover of these services will be a separate exercise from its restructuring plan. The Government will be responsible for any profit and loss incurred by MAS for the provision of these services,” he said.

In response to this latest development, Idris replied in a statement that they had just been informed of the decision and would await details from the ministry.

“Once the details are received, we will need to study them before making a decision,” he said.

FAX chief operating officer Raja Mohd Azmi Raja Razali said they were pleased with the announcement, as it would enable them to work together with Firefly on a seamless handover.

“My main concern is with the staff in Sabah and Sarawak. They have my assurance that we will take care of them in the eventual transfer.

“All employees based in Miri and Kota Kinabalu will have the option of joining Firefly or AirAsia Long Haul,” he said in a statement.

He added that this resolution would allow AirAsia Long Haul to concentrate its efforts in making the company the world’s first long-haul low-cost airline.

According to Bernama, Sarawak Tourism Board chief executive officer Gracie Geikie said it would be a big help towards reinstating tourism destinations in the state’s rural areas on the global map.

“As it is 100% owned by MAS, Firefly is in the best position to take over the service,” she said.

She said tourism players in the state went through an “expensive experience” after FAX took over the service.

In Kota Kinabalu, acting Sabah Tourism, Environment and Culture Minister Datuk Karim Bujang said the step would not only greatly benefit the people living in rural areas but would also help boost tourism.

Source : STAR
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