Caterham Jet from SZB, Another Air Asia spinoff
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Caterham Jet from SZB, Another Air Asia spinoff
Caterham Jet unlikely to hurt MAS, say analysts
Written by Chua Sue-Ann
Thursday, 10 November 2011 12:05
KUALA LUMPUR: While analysts remain sceptical on AirAsia Bhd’s boss Tan Sri Tony Fernandes’ purported plans for a new super-premium regional airline, some analysts opine that existing carriers will not be impacted if the plans come to be.
A daily newspaper yesterday reported that Fernandes’ new super-premium full-service carrier (FSC), likely to be named Caterham Jet, could commence operations out of Subang airport in May next year.
Some aviation analysts have questioned the need for a new airline, which they argue could hurt Malaysian Airline System Bhd (MAS) by piling on the competition.
After a recent share-swap deal with MAS’ major shareholder Khazanah Nasional Bhd, Fernandes is now a substantial shareholder in MAS and its unit Firefly, as well as AirAsia and AirAsia X Bhd.
Says one analyst: “Why set up a new airplane? It will make life difficult for everyone and cannibalise MAS and AirAsia. It is a zero sum game so who will benefit?”
OSK Research analyst Ahmad Maghfur Usman however said that the plans, if it comes to be, will unlikely hurt MAS or AirAsia as Caterham Jet is targeting a different market segment.
“Caterham Jet is looking at a niche market, targeting the super rich so it shouldn’t hurt MAS too much.
The proposed Caterham Jet is viewed as not directly competing with Malaysia Airlines or AirAsia as it will target a different market segment. “It is a new thing in the Asean market and it could be something that Tony would like to pioneer for this region,” Ahmad Maghfur said.
Caterham Jet is said to be a direct competitor with Qantas Airways Ltd’s upcoming Asia-based super-premium FSC, RedQ.
Ahmad Maghfur also opined that a sufficient capacity for the proposed super-premium jet would for three aircraft to be operated on a charter basis for the moment.
However, Ahmad Maghfur added that before the Caterham Jet plans can take off, Fernandes will first have to sort out the details of the collaboration agreement entered into by MAS and AirAsia following the share-swap deal.
MAS shares yesterday shed one sen to RM1.41 with 1.92 million shares exchanged. AirAsia shares meanwhile gained three sen to RM3.84 with 4.51 million shares traded.
A Maybank Investment Bank Research analyst noted that Caterham Jet would unlikely impact AirAsia, which operates in the budget segment, but could have a small impact on MAS’ first class segment.
“What is your definition of super premium? If it’s like what you see in the movies, where you can drive your car up to the plane and it’s a luxury flight, the real competition is with private charter jets and not so much MAS,” said the analyst.
Some analysts have also cautioned that Fernandes’ plans hinge on whether the new airline can obtain the necessary government and regulatory approvals.
The report, quoting unnamed aviation sources, also said the airline had yet to be granted an operating licence but has secured several Bombardier CRJ aircraft which have been sent for retrofitting.
However, the Maybank IB Research analyst noted that there should be no reason why the government should deny Fernandes the licence as long as the airline meets all the safety requirements.
“I think the government is not in the position to agree or disagree with a person’s business plan,” said the analyst.
But with the global economy still wracked with uncertainty, there remains a question mark over whether Fernandes’ aspiration for the super-premium airline can take off in current conditions.
“There is really no rush to move into the super premium market. With the global uncertainties, even the super-rich are keeping a watch on global markets and their net asset values,” Ahmad Maghfur said.
This article appeared in The Edge Financial Daily, November 10, 2011.
How and why Fernandes is allowed to compete against his own holdings Malaysia Airlines is a mystery. When the ‘share swap’ deal was announced in August, they justification was Fernandes is a champion of low cost carrier and he is supposed to use his experience and ‘excellent marketing strategy’ to bring up Malaysia Airlines. Now, he is competing against Malaysia Airlines in the premium and full service airline jet service.A daily newspaper yesterday reported that Fernandes’ new super-premium full-service carrier (FSC), likely to be named Caterham Jet, could commence operations out of Subang airport in May next year.
Some aviation analysts have questioned the need for a new airline, which they argue could hurt Malaysian Airline System Bhd (MAS) by piling on the competition.
After a recent share-swap deal with MAS’ major shareholder Khazanah Nasional Bhd, Fernandes is now a substantial shareholder in MAS and its unit Firefly, as well as AirAsia and AirAsia X Bhd.
Says one analyst: “Why set up a new airplane? It will make life difficult for everyone and cannibalise MAS and AirAsia. It is a zero sum game so who will benefit?”
OSK Research analyst Ahmad Maghfur Usman however said that the plans, if it comes to be, will unlikely hurt MAS or AirAsia as Caterham Jet is targeting a different market segment.
“Caterham Jet is looking at a niche market, targeting the super rich so it shouldn’t hurt MAS too much.
The proposed Caterham Jet is viewed as not directly competing with Malaysia Airlines or AirAsia as it will target a different market segment. “It is a new thing in the Asean market and it could be something that Tony would like to pioneer for this region,” Ahmad Maghfur said.Caterham Jet is said to be a direct competitor with Qantas Airways Ltd’s upcoming Asia-based super-premium FSC, RedQ.
Ahmad Maghfur also opined that a sufficient capacity for the proposed super-premium jet would for three aircraft to be operated on a charter basis for the moment.
However, Ahmad Maghfur added that before the Caterham Jet plans can take off, Fernandes will first have to sort out the details of the collaboration agreement entered into by MAS and AirAsia following the share-swap deal.
MAS shares yesterday shed one sen to RM1.41 with 1.92 million shares exchanged. AirAsia shares meanwhile gained three sen to RM3.84 with 4.51 million shares traded.
A Maybank Investment Bank Research analyst noted that Caterham Jet would unlikely impact AirAsia, which operates in the budget segment, but could have a small impact on MAS’ first class segment.
“What is your definition of super premium? If it’s like what you see in the movies, where you can drive your car up to the plane and it’s a luxury flight, the real competition is with private charter jets and not so much MAS,” said the analyst.
Some analysts have also cautioned that Fernandes’ plans hinge on whether the new airline can obtain the necessary government and regulatory approvals.
The report, quoting unnamed aviation sources, also said the airline had yet to be granted an operating licence but has secured several Bombardier CRJ aircraft which have been sent for retrofitting.
However, the Maybank IB Research analyst noted that there should be no reason why the government should deny Fernandes the licence as long as the airline meets all the safety requirements.
“I think the government is not in the position to agree or disagree with a person’s business plan,” said the analyst.
But with the global economy still wracked with uncertainty, there remains a question mark over whether Fernandes’ aspiration for the super-premium airline can take off in current conditions.
“There is really no rush to move into the super premium market. With the global uncertainties, even the super-rich are keeping a watch on global markets and their net asset values,” Ahmad Maghfur said.
This article appeared in The Edge Financial Daily, November 10, 2011.
Of course consumers would prefer Caterham Jet over Malaysia Airlines or FireFly. It is jet service and operating much closer to Klang Valley.
That is not as mysterious how and why Ministry of Transport changed its ‘All turbo props’ policy for Lapangan Terbang Sultan Salahuddin Abdul Aziz Shah. Previously, only turbo props commuter airlines in the likes of FireFly and Berjaya Air are allowed to operate from the airport. This ‘Flip-Flop’ing must be detrimental for the Malaysian Government.
We were told about ‘Sapphire Airlines’ as part of the package for the ‘share-swap’ deal.
Malaysia Airlines was asked to stop service Cape Town and Buenos Aries. It was said with Malaysia Airlines’ own town hall meeting, the service were to be handed to AirAsia X. Word has it from sources that as soon as Prime Minister Dato’ Seri Mohd. Najib Tun Razak arrived home from his Hajj trip, the instruction was put on hold. So many ways are being crafted to ‘steal the market’ away from Malaysia Airlines.
Then again, if Fernandes is allowed to start a brand new airlines Caterham Jet and is in direct competition with GLC Malaysia AIrlines in the same sector and market, shouldn’t the Government liberalise the airlines business and bring other players in?
Again, the devour of Malaysia Airlines came from day one. Not now but from the days when Rural Air Service was handed to him by then PM ‘Flip-Flop’ Dato’ Seri Abdullah Ahmad Badawi on a silver platter, with all the gold laced trimmings of Government subsidy and he capitalise for his ‘book building’. No one has seen yet anything what Fernandes brought into Malaysia Airlines. The past three months was all about Fernandes using his entire business mini-empire to cannibalise every single bit of the national carrier.
Isn’t it mind boggling how he is allowed to get away with murder and now, cannibalism?
P/S: During the Roman times, there was a brutal Emperor Gaius Julius Caesar Augustus Germanicus who is also known as Caligula. Fernandes must be a reincarnation of him, with the name “Greedy Ular”
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it wont hurt MAS
Caterham Jet unlikely to hurt MAS, say analysts
It wont hurt MAS because by then MAS would have been dead.
A dead person wont be hurt in anyway.
It wont hurt MAS because by then MAS would have been dead.
A dead person wont be hurt in anyway.
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No Approval.....Yet
Red flag for Tony's Caterham Jet?
Contributed by M.A. Wind, Asia Sentinel
Monday, 14 November 2011
Red flag for Tony's Caterham Jet?
With Fernandes, who controls AirAsia, uncharacteristically silent on the news report yesterday, many analysts do not
know what to make of the idea.
Kuala Lumpur: If analysts were stumped by the share swap between AirAsia Bhd founders and Khazanah Nasional Bhd
earlier, they are rendered speechless by Tan Sri Tony Fernandes' purported super-premium carrier proposal.
It was reported that the airline is to be known as Caterham Jet, and will compete head-on with Qantas' upcoming RedQ
super-premium airline.
With Fernandes, who controls AirAsia, uncharacteristically silent on the news report yesterday, many analysts do not
know what to make of the idea.
A news daily quoting unnamed sources reported that Fernandes plans to start his own regional super-premium airline
with a Bombardier aircraft fleet flying out of Subang in May 2012.
Checks with officials in Malaysia Airports Holdings Bhd and the Department of Civil Aviation, however, showed that
neither had been approached on the idea.
According to sources, Fernandes is yet to apply for an air service licence (ASL) or air service permit (ASP) to start a new
airline.
An ASL is for scheduled operations (commercial), while ASP is for non-scheduled (charter) operations.
The next step would be to apply for an air operator certificate.
MAS has also not applied for a new licence yet.
It is also understood that there has been no change to Ministry of Transport's directive that Sultan Abdul Aziz Shah
Airport (Subang Airport) only caters to turboprop aircraft and corporate jets.
"Such a move by Fernandes does seem like it is going against its collaborative agreement with MAS and would hurt
MAS' premium plans," OSK Research analyst Ahmad Maghfur Usman told Business Times.
He opined, however, that should the airline operate 20-30 seater aircraft for the super-rich, it should not affect MAS'
operations.
Another issue raised was whether the government would agree to such plan.
"The whole concept of the deal between AirAsia and MAS was to have a healthy ecosystem in the aviation industry. How
would this fit in with that? It appears to be at odds with it," said an analyst who declined to be named.
Another analyst declined to comment much since details of the plan were still sketchy.
"What's the definition of super-premium, is it first-class or business class?
"Subang is still very much for turboprop and private jet operations. Will the government be willing to reverse that
directive. It's still too early to say anything," he said.
Fernandes could not be reached for comment.
I don't like the way AirAsia has two daughter companies in Indonesia and Thailand which it owns for about 49%, but that
is still understandable to a certain degree given the company laws in those countries.
I don't like the way AirAsiaX suddenly popped up out of the ashes of FAX, while only owned by AirAsia for a small part
(20% with an option to increase this to 30%):
I don't like the deal with MAS, where Tony Fernandes suddenly became Director and one of the largest shareholders
(through his holding company) of MAS.
And I don't like the above proposed deal regarding Caterham Jet.
I see everywhere "conflict of interest" and "related party transactions". This is a nightmare scenario from a Corporate
Governance point of view.
Tony was at the right time at the right moment and yes, I have to agree, he fully took charge of the opportunity presented
to him, hired lots of people, got things going with his entrepeneurial flair. Full credits to that.
But there was absolutely no reason to structure his holdings in the above way, he could easily have done things in the
right, transparent way, grouping all airline companies under one holding company, with the minority shareholders
investing in the holding company, minimizing the effects of related party transactions.
When things go good and the share price of AirAsia rises, nobody will complain. However, this could very easily change
when things do not go well.
Contributed by M.A. Wind, Asia Sentinel
Monday, 14 November 2011
Red flag for Tony's Caterham Jet?
With Fernandes, who controls AirAsia, uncharacteristically silent on the news report yesterday, many analysts do not
know what to make of the idea.
Kuala Lumpur: If analysts were stumped by the share swap between AirAsia Bhd founders and Khazanah Nasional Bhd
earlier, they are rendered speechless by Tan Sri Tony Fernandes' purported super-premium carrier proposal.
It was reported that the airline is to be known as Caterham Jet, and will compete head-on with Qantas' upcoming RedQ
super-premium airline.
With Fernandes, who controls AirAsia, uncharacteristically silent on the news report yesterday, many analysts do not
know what to make of the idea.
A news daily quoting unnamed sources reported that Fernandes plans to start his own regional super-premium airline
with a Bombardier aircraft fleet flying out of Subang in May 2012.
Checks with officials in Malaysia Airports Holdings Bhd and the Department of Civil Aviation, however, showed that
neither had been approached on the idea.
According to sources, Fernandes is yet to apply for an air service licence (ASL) or air service permit (ASP) to start a new
airline.
An ASL is for scheduled operations (commercial), while ASP is for non-scheduled (charter) operations.
The next step would be to apply for an air operator certificate.
MAS has also not applied for a new licence yet.
It is also understood that there has been no change to Ministry of Transport's directive that Sultan Abdul Aziz Shah
Airport (Subang Airport) only caters to turboprop aircraft and corporate jets.
"Such a move by Fernandes does seem like it is going against its collaborative agreement with MAS and would hurt
MAS' premium plans," OSK Research analyst Ahmad Maghfur Usman told Business Times.
He opined, however, that should the airline operate 20-30 seater aircraft for the super-rich, it should not affect MAS'
operations.
Another issue raised was whether the government would agree to such plan.
"The whole concept of the deal between AirAsia and MAS was to have a healthy ecosystem in the aviation industry. How
would this fit in with that? It appears to be at odds with it," said an analyst who declined to be named.
Another analyst declined to comment much since details of the plan were still sketchy.
"What's the definition of super-premium, is it first-class or business class?
"Subang is still very much for turboprop and private jet operations. Will the government be willing to reverse that
directive. It's still too early to say anything," he said.
Fernandes could not be reached for comment.
I don't like the way AirAsia has two daughter companies in Indonesia and Thailand which it owns for about 49%, but that
is still understandable to a certain degree given the company laws in those countries.
I don't like the way AirAsiaX suddenly popped up out of the ashes of FAX, while only owned by AirAsia for a small part
(20% with an option to increase this to 30%):
I don't like the deal with MAS, where Tony Fernandes suddenly became Director and one of the largest shareholders
(through his holding company) of MAS.
And I don't like the above proposed deal regarding Caterham Jet.
I see everywhere "conflict of interest" and "related party transactions". This is a nightmare scenario from a Corporate
Governance point of view.
Tony was at the right time at the right moment and yes, I have to agree, he fully took charge of the opportunity presented
to him, hired lots of people, got things going with his entrepeneurial flair. Full credits to that.
But there was absolutely no reason to structure his holdings in the above way, he could easily have done things in the
right, transparent way, grouping all airline companies under one holding company, with the minority shareholders
investing in the holding company, minimizing the effects of related party transactions.
When things go good and the share price of AirAsia rises, nobody will complain. However, this could very easily change
when things do not go well.
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And.....
Red flag for Tony's Caterham Jet?
By Presenna Nambiar
presenna @nstp.com.my
2011/11/10
With Fernandes, who controls AirAsia, uncharacteristically silent on the news report yesterday, many analysts do not know what to make of the idea.
Kuala Lumpur: If analysts were stumped by the share swap between AirAsia Bhd founders and Khazanah Nasional Bhd earlier, they are rendered speechless by Tan Sri Tony Fernandes' purported super-premium carrier proposal.
It was reported that the airline is to be known as Caterham Jet, and will compete head-on with Qantas' upcoming RedQ super-premium airline.
With Fernandes, who controls AirAsia, uncharacteristically silent on the news report yesterday, many analysts do not know what to make of the idea.
A news daily quoting unnamed sources reported that Fernandes plans to start his own regional super-premium airline with a Bombardier aircraft fleet flying out of Subang in May 2012.
Checks with officials in Malaysia Airports Holdings Bhd and the Department of Civil Aviation, however, showed that neither had been approached on the idea.
According to sources, Fernandes is yet to apply for an air service licence (ASL) or air service permit (ASP) to start a new airline.
An ASL is for scheduled operations (commercial), while ASP is for non-scheduled (charter) operations.
The next step would be to apply for an air operator certificate.
MAS has also not applied for a new licence yet.
It is also understood that there has been no change to Ministry of Transport's directive that Sultan Abdul Aziz Shah Airport (Subang Airport) only caters to turboprop aircraft and corporate jets.
"Such a move by Fernandes does seem like it is going against its collaborative agreement with MAS and would hurt MAS' premium plans," OSK Research analyst Ahmad Maghfur Usman told Business Times.
He opined, however, that should the airline operate 20-30 seater aircraft for the super-rich, it should not affect MAS' operations.
Another issue raised was whether the government would agree to such plan.
"The whole concept of the deal between AirAsia and MAS was to have a healthy ecosystem in the aviation industry. How would this fit in with that? It appears to be at odds with it," said an analyst who declined to be named.
Another analyst declined to comment much since details of the plan were still sketchy.
"What's the definition of super-premium, is it first-class or business class?
"Subang is still very much for turboprop and private jet operations. Will the government be willing to reverse that directive. It's still too early to say anything," he said.
Fernandes could not be reached for comment.
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Caterham Jet, the carrier being spearheaded by AirAsia’s Tony Fernandes, will be run by Peter Leiman, the man behind the European air taxi operator, Blink. The full exclusive story by Leithen Francis is on our AWIN premium site (here).
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It will be interesting to see if this will actually work and make money. Every time something like this had been tried in the US or between the US and Europe, it has failed quite quickly and at a large cost. The "super rich" want to go when and where they want. If he really wants to get into the high end side of air transport he should either set up his own charter arm or contract with an established one to provide private jet connections like Lufthansa does with NetJets. That said, he has been on quite a roll and it is possible the Asian market can support it. It is odd that he would start an "airline" to compete with his own holdings unless he stands to benefit somehow from harming or killing off MAS since I really can't see this as any sort of good thing for MAS. Time will tell.
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This rotund bangla will try everything to milk the system with his corrupt patrons running the government. This operation will be used to ferry the super rich cronies; hey like the minister who went to the hajj on a business jet recently.
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tf knows that he cannot order some more aeroplanes without rousing undue suspicion, hence this venture to attract more suckers and utilise ill gotten funds his patrons had amassed. New ventures, new planes, new handling contracts mean more opportunities for kickbacks for the patrons to make more hay.
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OSK Researchapproval
My seventh sense tell me that this OSK Research and Air Asia gangs is a blood brothers relationship. This OSK would always go against the mainstream ideas and approval. The " SELL" Malaysia Airlines and "BUY" Air Asia has been on their agenda eversince especially before the secret share swaps.
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I hope caterham bikes will be on offer soon Caterham Bikes especially their carbon e-bike
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All wealthy business men and women in malaysia have there own jets already. and most probably dont trust toni with there business arrangements. Its always its Toni way or its TONI way..
Dont like its...tough...
Dont like its...tough...
