Tony Fernandes and Kamarudin Meranun received salaries of more than RM14 million each for the 2021 financial year (FY2021) ending Dec 31, Capital A Bhd’s annual report shows – a huge increase from what they received in 2020.
This comes amid mounting criticism from members of the public still waiting to be refunded for flights cancelled due to the Covid-19 pandemic.
The report, published on April 29, said Fernandes – the CEO of Capital A, formerly known as AirAsia Group Bhd – received RM14,947,213 in addition to RM124,781 in allowances for meetings, travel and other matters.
Kamarudin, the executive chairman of Capital A, meanwhile received RM14,051,429.
This marked a sharp increase from the RM4.8 million they had received in FY2020.
In April 2020, Fernandes was reported as saying that he and Kamarudin would not receive a salary while AirAsia employees agreed to take a paycut of up to 75% due to the impact of the Covid-19 outbreak on the company’s financial performance.
In FY2021, Capital A recorded a drop in net loss, to RM3.11 billion from RM5.11 billion recorded the year before.
It earned RM1.73 billion in revenue, down from RM3.27 billion posted for FY2020.
AirAsia Group Bhd was rebranded as Capital A in January, as part of efforts to transform the company into an investment holding company with a portfolio of lifestyle and travel businesses instead of merely an airline.
Checks of Capital A’s quarterly financial performance for FY2021 show that the company recorded a net loss of RM767.42 million in the first quarter (Q1) ended March 31, 2021, followed by a net loss of RM580.06 million in Q2 ended June 30, 2021.
It continued to face pressure in Q3 and Q4, with net losses of RM887 million and RM884.09 million respectively.
Meanwhile, passengers who had purchased tickets from AirAsia X Bhd, its long-haul airline, continued to call for refunds for their cancelled flights.
Local and international travellers alike have been urging the management, including Fernandes, to return their money for flights scrapped as far back as two years ago.
Source : Malaysia Now
AirAsia X Compensates Over 270,000 Cancelled Bookings With 5-Year Travel Vouchers
AirAsia X (AAX) announced today, 15 July, that it has compensated over 270,000 cancelled bookings caused by the pandemic with five-year travel vouchers
With that, the medium to long-haul affiliate airline of AirAsia Aviation Group said they have successfully compensated 80% of all cancelled bookings over the past two years, including RM499 Unlimited Pass holders, to full value of the outstanding bookings.
In a statement, AAX acting group chief executive officer Tan Sri Tony Fernandes said they have given back more than USD92 million (RM409.4 million) worth of travel vouchers to over a quarter million guests.
Tony added that AAX is unable to give back cash refunds despite customer frustrations
“AAX wasn’t able to pay cash refunds due to the legal process of the restructuring, but we have worked hard to balance survival with paying everyone back with credit vouchers to fly again to exciting destinations now and in the future,” he said.
He also thanked customers who have shown them patience and understanding.
Meanwhile, the company said the five-year travel vouchers can be used to book any AAX flights (airline code D7) immediately upon issue
The voucher can be used for international destinations currently on sale and more routes that will be added in the future, including Japan, Australia, Hawaii, New Zealand, London, Dubai, and Istanbul.
AAX will also continue to prioritise processing the remaining compensation entitlements, including bookings made by travel agents, in the coming weeks. They will be contacting these guests by email.
Guests who have yet to receive the travel voucher are also encouraged to register for an AirAsia Rewards members account using the same email address used for their cancelled booking.
Questions raised over half-a-billion ringgit govt loan for troubled AirAsia
A half-a-billion loan given to troubled airline AirAsia through the use of a government credit facility has raised eyebrows among aviation industry observers.
In October last year, AirAsia announced that it had received approval for an 80% guaranteed loan of up to RM500 million from Danajamin Nasional Bhd, a financial guarantee insurer under the finance ministry-owned Bank Pembangunan Malaysia.
The approval for AirAsia, the budget carrier helmed by Tony Fernandes, came less than six months after the bank named Nazir Razak, the former chairman of CIMB Group and the brother of former prime minister Najib Razak, as its new chairman.
The scheme under which AirAsia got the loan was introduced by then prime minister Muhyiddin Yassin following the Covid-19 outbreak, and is aimed at providing immediate and targeted working capital support to companies adversely impacted by the pandemic.
But what raises questions is the fact that the whopping loan amount was passed despite AirAsia’s classification as PN17, a reference to “Practice Note 17/2005”, the document issued by Bursa Malaysia labelling companies facing financial troubles. A company classified as PN17 is also required to submit a restructuring plan to the Securities Commission.
AirAsia was classified as PN17 on Jan 13 after Bursa Malaysia dismissed its appeal to extend by 18 months its clearance period ending Jan 7.
One aviation analyst said there had been no sign so far that companies like AirAsia could recover from the impact of the pandemic.
Shukor Yusof said the emergence of the Omicron Covid-19 variant, although apparently less severe than the Delta strain, continues to haunt businesses.
“The government should have set conditions when approving Danajamin’s contribution and received benefits from AirAsia as the money belongs to the people,” Shukor, a former Standard & Poor’s analyst with over two decades’ experience in the aviation industry, told MalaysiaNow.
He said the government could have set a six-month period for AirAsia to prove that it is capable of shaking off its PN17 status and ensuring a recovery of operations.
Shukor said it was no issue for the government to approve the funds, but that there were concerns about AirAsia’s current direction or lack thereof.
He said while AirAsia had embarked on a range of initiatives such as venturing into other areas of business, the worry was that this might only add to the financial pressure which appeared to be at a critical level.
The budget airline has recorded losses for the last two financial years, posting a net loss of RM283 million in FY 2019 and RM5.89 billion in FY 2020.
“In these challenging conditions, it has involved itself in business ventures that have nothing to do with air travel, like e-hailing, drones, food delivery and so on.”
Shukor also referred to the statement by AirAsia’s Fernandes that it would become an investment company.
“If this is true, the government should not step in,” he said, adding that Danajamin’s intention was to strengthen the company’s finances for airline operations.
AirAsia came under attack from its customers after it said it would not refund them for flights cancelled due to the pandemic.
Instead, the company said it would dish out credit to tens of thousands of affected passengers.
Despite being flooded with customer complaints, Fernandes has announced expansion plans for AirAsia, including the launch of a “super app”.
But Shukor is not convinced.
“While the new business through the launch of the AirAsia Super App is expected to generate some revenue for the group, it will not be the same as the revenue generated through the airline business,” he said.
Shukor nonetheless agreed with the government’s move to help AirAsia through Danajamin given its contributions to the economy before the onslaught of Covid-19.
“AirAsia contributed to the flight ecosystem in Malaysia, and it played an important role in bringing tourists into the country before Covid-19,” he said.
“If the government does not help, the company might begin to face other bigger problems like suspension or bankruptcy. This would further complicate the situation as AirAsia is closely linked with the supply chain in, for instance, the tourism and hotel industries.”
But Shukor believes that AirAsia, like other airline companies, has an uphill task ahead in restoring its flight operations given that Covid-19 infection remains a global threat.
“It has been categorised as PN17, but it can still overcome this if it can prove to Bursa Malaysia and its investors that the company is capable of financing its operations, assuming that it can get financial support from other parties.”
Fernandes had remained optimistic that his airline would be profitable again after having survived 16 months of being grounded.
He also said that AirAsia was forming a plan to streamline its financial position to tackle its PN17 status.
AirAsia managed to raise more than RM2.5 billion through fundraising activities including private placements of RM336.48 million in the first quarter of 2021.
It raised another RM974.51 million through the issuance of deductible rights from redeemable convertible unsecured Islamic debt securities for a period of seven years, and plans to raise additional capital of up to RM400 million this year.
Source : Malaysia Now