FROM DIALOG NEWSEDGE

[Business Times (Malaysia)]

BUDGET carrier AirAsia Bhd yesterday denied accusations it was given preference over Malaysia Airlines (MAS) by the Government in the recently announced domestic air rationalisation exercise.

"We are not the Government's 'golden child' (as described by certain quarters) and did not receive any special treatment under the exercise," said its chairman Datuk Pahamin A. Rajab in Sepang.

AirAsia had called a press conference yesterday to clarify what it termed as public misconceptions that it was getting the better end of the deal.

Under the exercise, AirAsia was given 96 non-trunk routes to operate compared with 19 trunk routes for MAS.

Pahamin also reiterated that AirAsia should not be blamed for MAS' workforce cuts. On Monday, the national carrier announced plans to cut its workforce by about 6,500 jobs via its mutual separation scheme (MSS).

"The MSS is part of MAS' rationalisation exercise, which involves its entire workforce, not just those working for the domestic sector.

"We are also willing to take in some of MAS staff, although we are not obligated to do so. Details on this will be made once the MSS exercise is completed," he added.

Pahamin also echoed earlier comments by its group chief executive officer Datuk Tony Fernandes, saying AirAsia may not need to take on any of the aircraft that MAS planned to cut from its fleet.

MAS, under the domestic rationalisation exercise, will also see its aircraft servicing the domestic sector reduced from 40 to 21.

"I think MAS parent company Penerbangan Malaysia Bhd can easily remarket these aircraft. I don't think they need our help on this," said Pahamin.

"Besides, we already have A320s in our fleet. It will be easier, from the maintenance aspect, for us to operate with one airplane model," he added.

Prior to the Government's announcement of the domestic rationalisation exercise, AirAsia had offered to either buy or lease between four and nine of MAS' current fleet of 39 B737-400s.

Pahamin also said Air Asia will be taking over from MAS only 70 point-to- point routes, and not 96, from August.

"This discrepancy is due to the different method that MAS adopts to tally the number of routes," he said.

He added that of the 70 routes, MAS will still be operating 19 trunk routes jointly with AirAsia and that both airlines are free to look at commercial viability, determine frequency and capacity as they feel their respective market warrants.

AirAsia will be increasing capacity on some of these routes to cater to anticipated increase in demand for low fares for point-to-point travel on some key routes.

Of the remaining 51 routes, 30 are being operated on Twin Otter aircraft while 13 are operated using MAS' Fokker 50 fleet.

"These routes make up for the Rural Air Services (RAS), which will be operated by a third party, but overseen by AirAsia. As such, AirAsia will not benefit from RAS," said Pahamin.