AirAsia shares fall after boss apologises for backing Najib
AirAsia shares fell as much as 10% but later recovered slightly, compared with a 0.9% fall in the broader Malaysian index.
AirAsia has several airlines in various Asian countries but Malaysia is its largest contributor to earnings. (Facebook pic)
KUALA LUMPUR: Shares in AirAsia Group Bhd fell as much as 10% today in the first trading session since May 9 and after its chief Tony Fernandes apologised for endorsing former prime minister Najib Razak in the election.
Najib was ousted by former leader Dr Mahathir Mohamad in a shock election result last week. Najibâs Barisan Nasional (BN) coalition, which had governed Malaysia since independence in 1957, was booted out of power for the first time.
AirAsia has several airlines in various Asian countries but Malaysia, its home market, is its largest contributor to earnings. In a highly regulated industry where its main rival is state-owned Malaysia Airlines, it relies on government approvals to support its growth plans.
Two days before Wednesdayâs poll, Fernandes released a video praising Najib and the governmentâs support of the low-cost airline he co-founded. Later that day, Najib posted photos of him and Fernandes standing in front of an AirAsia plane painted with a campaign slogan for Najibâs coalition.
âI am sorry for what has gone on. I buckled at the crucial moment in our history,â Fernandes said in a video released yesterday. âIt wasnât right and I will forever regret it.â
AirAsia shares fell as much as 10% today but later recovered slightly, compared with a 0.9% fall in the broader Malaysian index.
Fernandes said the video and campaign-themed livery was an effort to appease Najibâs government after he came under âintenseâ pressure in the lead-up to ele ctions for adding extra flights on polling day and refusing to fire a subsidiaryâs chairman who had expressed support for Mahathir.
AirAsia had announced extra flights and reduced fares to help voters return home to cast ballots.
Fernandes refused to fire Rafidah Aziz, a former minister who was campaigning for Mahathirâs coalition, as the chairman of AirAsia X, the long-haul arm of AirAsia.
âAs Rafidahâs impact and popularity grew, the pressure grew exponentially. It was getting harder and harder to resist the pressure from the prime ministerâs office,â he said.
Najibâs aides could not be reached for comment.
AirAsiaâs decision to add more flights on election day added to the pressure from Najibâs government, Fernandes said.
The governmentâs challengers criticised the decision to hold the election on a Wednesday, charging that it was an effort to dampen voter turnout and make it harder for Malaysians living away from home , many of whom support the opposition, to vote.
âWithin 24 hours, we were summoned by the (regulator) Malaysian Aviation Commission and told to cancel all those flights. That put us again under tremendous pressure,â Fernandes said, adding that his airline had added 120 flights.
The Malaysian Aviation Commission said in a statement on its website that it considered Fernandesâ claims to be âserious allegationsâ and it had launched an immediate investigation.
Fernandes apologises: They put the squeeze on us
Source: Google News