Wednesday, December 18, 2013

Malindo Air - Fallout between top owners Indon billionaire Rusdi & M'sia's NADI

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PETALING JAYA - More than a year into its partnership to form the country’s newest airline, Malindo Air, owners Indonesian billionaire Rusdi Kirana and National Aerospace Defence & Industries Bhd (Nadi) are said to have fallen out, with talk of a possible exit of Nadi from the business.

Sources say that the bone of contention between the two is to do with the leadership and management of Malindo Air.

It is understood that Nadi, which has largely been content with letting Rusdi steer the airline, is now keen to appoint its own candidate to helm it. Rusdi, however, is adamant that Chandran Rama Muthy, his former personal assistant remains as CEO of the airline.

This difference of opinion, among others, has led to the possibility of Nadi selling its stake in Malindo Air.

Checks with Companies Commission Malaysia however found that the shareholding in the company, Malindo Airways Sdn Bhd, has not changed.

The documents which were last updated on October 2012, showed that Nadi holds a 50.99% stake in Malindo Airways, its president Tan Sri Ahmad Johan one share, Rusdi another share while his Lion Grup holds the remaining 48.99% stake.

Rusdi did not respond to a request for comment.

When contacted via email, a Nadi spokeswoman acknowledged SunBiz's queries but did not comment further.

It is understood that while a change in shareholding would not affect the airline’s Air Operator’s Certificate, it would impact the Air Service License (ASL) secured by the airline.
An airline requires an ASL to offer scheduled services. An ASL typically looks at the economics aspects of running an airline, as to the credit worthiness of its shareholders and whether the shareholders comply with the country rules on investments.

The Rusdi-Nadi pairing has been an unusual one, with Nadi preferring to stay in the background in operational matters.

Nadi had said that its role in the airline, which started operations in March this year, would be mainly in providing maintenance, repair and overhaul services, while Rusdi through Lion Group would be providing the aircraft for its fleet.

According to RHB Research Institute in its report on the aviation sector yesterday, Malindo Air is expected to be less aggressive in its expansion plans due to its high cost structure.

“We notice that its airfare discounts have narrowed while there have been capacity cutbacks on some of its routes.”

“Furthermore its fleet delivery so far has been below the initial target of 12 aircraft,” the research house said. Malindo Air currently has six narrow-bodied aircraft.

It also reported that the airline has also opted for a new strategy of expanding regionally to destinations such as Indonesia, Bangkok and India as opposed to competing for domestic market share given the challenges in the local competitive landscape.

Malindo Air will start flying to India by late December at the earliest and February 2014 the latest. This is some seven months from its initial target of June 2013. - The Sundaily

Article taken from malaysia-chronicle

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