New super premium airline in the works

AirAsia chief Tan Sri Tony Fernandes, who already has interest in four airlines, is set to expand his empire further as he moves to start a new super-premium full-service carrier (FSC) that will compete head-on with Qantas’ upcoming Asia-based super-prernium FSC called RedQ aviation sources said.

Likely to be called Caterham Jet, the new airline is said to have yet to be granted an operating licence by the government, but sources said several Bombardier CRJ have been secured for the regional airline and have been sent for retrofitting.

Incidentally, it is believed that Fernandes’ Formula i Team Lotus will change its name to Caterharn next year. “Plans are for the proposed airline to operate out of Subang and commence operations in May next year. Some of the proposed routes include Bangkok, Jakarta and Singapore,” a source said.

Besides AirAsia, Fernandes now has stakes in AirAsia X, Malaysia Airlines (MA.S) and its unit Firefly. He became a substantial shareholder in the national carrier following the recent MAS-AirAsia share swap deal. Talk of the new airline operating out of Subang has been further strengthened on keen interest by MAS and Firefly to redevelop Terminal2 of the Sultan Abdul Aziz Shah Airport in Subang.

Sources said Malaysia Airports Holdings Bhd (MA.HB) is expected to award the concession to redevelop Terminal 2.

Subang SkyPark Sdn Bhd is believed to be the frontrunner for the job, as it is already managing the Skypark Terminal (formerly Termin.al 3) next door before the emergence of MAS as a strong contender for the redevelopment works.

To recap, SunBiz reported in April that Subang Skypark was in talks with MARE to redevelop Terminal 2, which has been vacant since November 2009 after the airport operator relocated its corporate headquarters to Sepang.

It is understood that Subang Skypark has since submitted its proposal for the redevelopment of the terminal to MAHB and is awaiting a decision from the airport operator on the matter.

According to sources, Firefly, which currently operates its turboprop aircraft out of Skypark Terminal, had also earlier expressed its interest to redevelop Terminal 2. However, its proposal is unlikely to see the light of day following the MAS-AirA.sia partnership.

An industry source said there has been serious lobbying lately from MAS, under its new management team and deputy CEO Mohammed Rashdan Yusof , to redevelop and take over Terminal 2.

“It is unclear whether the lobbying from MAS is to get the national airline to manage and operate its subsidiary, Firefly, out of Terminal 2 or to allow the proposed new airline that is coming up under Fernandes’ stable of companies, to operate from there,” said a source.

Firefly and Berjaya Air are currently the only two airlines using SkyPark Terminal, operating the ATR 72-5oos and Deliavilland Dash 7.

However, observers pointed out that the new airline will further depress the local air travel industry at the expense of the people.

Already, they said, the recent MAS-AirAsia tie-up could have resulted in a monopoly, with MAS and Firefly being pushed to focus solely on premium air travel, while AirAsia dominates the low-cost market.

“With another new airline by Fernandes, he would be holding shares of five local airlines — AirAsia, AirAsia X, MAS, Firefly and the proposed Caterham Jet. “How would that hold up when the Competition Act 2010 is enforced on Jan I?” an observer asked.

The observer added that AirAsia fares to most domestic destinations have gone up despite assurance by Fernandes that the low-cost carrier’s fares will not rise after the MAS-AirAsia tie-up.

BY KANG STEW LI

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