By ZAIDI ISHAM ISMAIL
editor@dagangnews.com
KUALA LUMPUR Nov 15 - Companies which foster good relations with their suppliers, business partners and creditors are rare.
In a dog eat dog world, the corporate sector can be merciless and if the firm does not have the dough to pay the creditors - out you go.
In short, no money no talk and pay up quick lest the creditors will sue the firm.
However, the camaraderie shown between AirAsia X, Rolls Royce, Airbus, banks and others is admirable.
In a meeting between the parties last Friday, almost all creditors or 97% agreed to support AirAsia X (AAX) debt restructing plan totalling RM33.3 billion.
This is an example of a long lasting relationship between a company such as AAX and its creditors.
However, one lingering question remains - can the loss making and debt laden AAX return to profitability?
University Kuala Lumpur lecturer Professor Dr Abu Haniffah Abdullah said AAX will perenially be loss making unless it changes its business model.
"The cheap, no frills concept does not work for long haul flights as most long haul passengers are business people.
The business people mainly want comfortable air travel and are willing to pay more.
"The fares offered by AAX are also not that affordable to the budget traveller.
"So unless AAX tweaks its business model, I'm afraid AAX will continue to make losses," Abu Haniffah told DagangNewscom.
An analyst at a local investment bank meanwhile said the creditors move to support AAX is expected.
"The creditors have no choice but to support AAX's debt restructuring plan as they have much at stake.
If AAX dives, so will the creditors and they might never get their money back," the analyst told DagangNews.com.
The analyst said much is stake here for AAX as it was also rebuked last week by the Malaysia Aviation Commission.
The commission warned that stern action will be taken on AAX if it does not refund its passengers.
"AAX must not take this matter lightly as MAVCOM has the authority to reprimand or even clip AAX's wings and this will affect its income.
MAVCOM is right in this matter. AAX cannot treat its customers as if they are the company's creditors. - DagangNews.com
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