PETALING JAYA: Malindo Air, which is gearing to launch its services in March after it secured the principle air services licence from the Government recently, has denied it is in any financial difficulty.
“There is no financial problem. In fact, our funding is intact as we have strong financial backing from our shareholders,'' its chief executive officer Chandran Ramamuthy told StarBiz.
He was responding to an OSK Research report that quoted rumours saying that Malindo's major shareholder National Aerospace and Defence Industries Sdn Bhd (Nadi) was reluctant to pour more capital into its joint venture (JV) with Indonesia's PT Lion Grup.
Malindo is 51% owned by Nadi and 49% by PT Lion Grup, the parent of Indonesia's privately-owned airline, Lion Air, which in turn controls about half of the Indonesia domestic air travel market.
Nadi main shareholder Tan Sri Ahmad Johan when contacted yesterday declined comment while Lion Air president director Rusdi Kirana, who is also part owner of PT Lion Grup, was not available for comment as he was travelling to the United States.
Financing has not been an issue for Lion Air, which is buying more than 300 aircraft, with most of them funded by export credit agencies.
Chandran said Malindo was in the midst of submitting its application for the air operator's licence and was in the final stages of hiring the first batch of pilots and cabin crew who will undergo training beginning February to prepare themselves for its launch.
The issue of any shareholder not wanting to pour in money for the airline to take off had not cropped up, said someone familiar with the new low-cost airline.
The OSK report also said that “.... due to the JV's limited capital, we gather that Malindo charges a fee for any new commercial pilot licence (CPL) holder with B737 NG-type rating who is interested to become pilots. Charges are estimated at US$30,000 for the first 500 hours, with no salary.''
Chandran clarified that it was an industry practice to charge pilots a fee when they underwent aircraft-type training.
Some airlines charge candidates for the training and others absorb it initially but later bond the candidates for several years and deduct their salaries, and in some cases, this is not made transparent.
“It is an arrangement with Malindo. Given the huge number of unemployed graduates and the fact that Malindo is offering jobs, even if it charges or offers loans, it is still helping to absorb the excess number of pilots in the country; so that should not be seen as an issue,'' said an industry observer