KUALA LUMPUR (Aug 8): The announcement by AirAsia Bhd on July 31 that it was claiming RM409 million in damages from Malaysia Airports Holdings Bhd (MAHB) for allegedly breaching its duty as an airport operator came as a surprise, according to the DigitalEdge weekly in its latest edition.

The weekly’s Kamarul Azhar wrote that the spectacular growth of AirAsia, Asia’s largest low-cost carrier, over the last 15 years is attributed largely to the foresight of its chief Tan Sri Tony Fernandes.

Fernandes bought the then failing airline for a token sum of RM1, turned it around and transformed the air travel industry in Asia.

The DigitalEdge however said that AirAsia also had the support of the government through Malaysia Airports Holdings Bhd.

It said that in fact, over the last 1½ decades, the two industry leaders had grown together despite constantly being at loggerheads, for example about aeronautical charges.

But it added that most of the time, they ironed out their issues behind closed doors.

Now with Malaysia Airlines Bhd cutting its international routes and capacity, MAHB’s financial performance is even more dependent on the LCC, which in turn needs all the support it can get from the airport operator in order to maintain a smooth and efficient operation.

Citing an aviation industry expert, the weekly said: “You need to look back at the relationship. The friction is not new; it has gone on maybe for over 10 years.

“A personality clash between Tony (Fernandes) and former MAHB head Tan Sri Bashir (Ahmad Abdul Majid) complicated matters,” it quoted Syukor Yusof, an aviation industry expert at Endau Analytics.

The weekly said industry observers say Fernandes and Bashir could not come to terms on a lot of issues regarding air transport and believe this testy relationship between the corporate captains eventually culminated in the RM409 million lawsuit, adding that  this was despite the departure of Bashir last year.

Bashir was replaced by Datuk Badlisham Ghazali, former CEO of Multimedia Development Corp, as MAHB head in June last year.

Before this, in July 2012, Aireen Omar was appointed as the CEO of AirAsia. Despite the new faces, relations between the two entities have reached an all-time low, as evidenced by the letter of demand.

In its letter of demand, AirAsia claims that MAHB has failed and breached its contractual duties and duty of care, which has caused the airline to continue to suffer losses and damages. MAHB has dismissed the claim as baseless.

The RM409 million constituted 5% of MAHB’s net assets as at June 30, according to the airport operator’s reply to Bursa Malaysia’s query on Aug 3 with regard to the letter of demand.

Among AirAsia’s allegations, said MAHB, was that it failed to address overcapacity problems, to provide sufficient aircraft parking bays at LCCT and to maintain and operate a safe and efficient airport.

The airline has also alleged that MAHB failed to keep klia2 in good condition, to effect repairs and maintenance, and to consult it on the terminal’s operational issues and plans. The airline also alleges that MAHB failed to consult the group before making changes in the charging system for aeronautical services.

But at the heart of the matter is the soil depressions that are causing ponding at klia2’s parking bays and taxiways, which, according to AirAsia, have caused damage to the airline.

MAHB has dismissed the claims and said it has appointed legal advisers to look into the matter.

For a detailed understanding of the rift between the low cost carrier and the airport operator, read the latest edition of the DigitalWeekly for the week of August 10 – August 16.