May challenge AirAsia for dominance.
MYAirline Sdn Bhd (MYAirline), a newly-established ultra-low-cost carrier (ULCC), is expected to be launched soon, sources said, noting that it will challenge AirAsia Group Bhd’s dominance in the budget airline industry.
A check on the Malaysian Aviation Commission’s (Mavcom) website by theedgemarkets.com showed that the new ULCC, which was previously registered as Z9 Elite Sdn Bhd, has been granted conditional approval for an air service licence (ASL) by the commission on Dec 22, 2021. The licence is valid for 12 months from Jan 1 to Dec 31, 2022. An ASL allows the licence holder to conduct scheduled passenger and cargo services like those of Malaysia Airlines Bhd and AirAsia.
MYAirline’s filing with the Companies Commission of Malaysia (SSM) revealed that it has two million shares at RM1 per share, amounting to RM2 million in paid-up capital.
The company named Zillion Wealth Bhd (88%), Trillion Cove Holdings Bhd (10%) and Rayner Teo Kheng Hock (2%) as its shareholders.
Its directors are Datuk Goh Hwan Hua, Datuk Abd Hamid Mohd Ali, Datuk Seri Azharuddin Abdul Rahman, Rayner Teo Kheng Hock and Jothi Prakash Murugan, the SSM filing revealed.
According to sources, Goh is believed to be the financial backer of the new airline venture. He is listed on SSM as the shareholder of both Zillion Wealth and Trillion Cove, bringing his stake in MYAirline to 98%.
Trillion Cove’s website also showed that Goh, who is the chief executive officer and director of the company, has a background in audit and corporate finance, and that he is an entrepreneur who has founded and built companies in the e-commerce, online business, e-ticketing, fintech, retail and tourism space.
Jothi, meanwhile, has a background in information technology (IT) and serves as a director of Trillion Cove.
Apart from Goh and Jothi, the three other directors — Abd Hamid, Azharuddin and Teo — are aviation industry veterans.
Abd Hamid was previously the chief operating officer of Malaysia Airport Holdings Bhd between 1992 and 2016.
Azharuddin was formerly the director-general of the Malaysian Civil Aviation Department (DCA) and former chairman of the Civil Aviation Authority of Malaysia (CAAM) between 2008 to 2018.
Teo was previously AirAsia’s group head of sales and distribution between 2004 to 2020.
“MYAirline’s plan is to build an airline business in Malaysia and maybe challenge AirAsia for dominance,” a source told theedgemarkets.com.
The source said now is a good time to start a new airline as aircraft lessors are desperate for business, which makes for super cheap leasing rates, while pilots and flight crew who were retrenched during the Covid-19 pandemic could also be hired at reasonable salaries.
“A new airline starting from scratch means it has a fresh balance sheet which is not damaged by the pandemic,” the source added.
The entry of a new ULCC was first cited by CGS-CIMB Research in a report on Monday (Jan 17) as a potential derating catalyst for AirAsia.
“Credible information that a new ULCC is currently in the process of seeking regulatory approval to set up in Malaysia, having signed deals to lease two Airbus A320s at cheap leasing rates,” CGS-CIMB Research aviation analyst Raymond Yap wrote.
He is reiterating a “reduce” call on AirAsia, with an unchanged target price of 14 sen, as he thinks it may be very difficult for AirAsia to recover from slipping into Practice Note 17 status last week, which has resulted in panic selling by investors, even though suspension and delisting are at least 21 months away.
AirAsia shares were lower by two sen or 3.23% at 60 sen at Monday’s midday break, giving the group a market capitalisation of RM2.44 billion.
A320s also make up the majority or 168 of AirAsia’s current fleet of 210 aircraft, based on its annual report for 2020.
Besides MYAirline, another new airline Johor-based SKS Airways Sdn Bhd has also been granted an ASL on Dec 22, 2021 by Mavcom.
SKS Airways’ ASL is effective for 36 months or three years from Jan 1, 2022 to Dec 31, 2024.
SKS Airways — which is wholly owned by Johor-based SKS Group and founded by low-profile businessman Alan Sim See Kiong — is aiming to launch its first flight from Subang to Pangkor on Jan 25. It operates a fleet of DHC6 Twin Otter turboprop aircraft.
SKS Airways’ website showed that it is focusing on domestic short-range flights to island-based and coastal resorts from major cities within Peninsular Malaysia. – The Edge Markets