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Firefly's future still in limbo

24 November 2011

Petaling Jaya : The abrupt resignation of Firefly managing director Datuk Eddy Leong Chin Tung has left questions swirling on the future of the community airline a unit of Malaysia Airlines (MAS).

Speculation is rife that Firefly could cease to exist by April next year.

Sources said Leong s resignation has fuelled rumours that MAS could phase out the Firefly brand to focus on being a full service premium carrier Firefly s current fleet of turboprops could be deployed to MAS other unit MASWings.

They added that Firefly s current air services licence (ASL) which allows an airline to operate scheduled air services, could possibly be transferred to the new super-premium-full-service-carrier that AirAsia group CEO Tan Sri Tony Fernandes is looking to set up.

"The situation would be similar to how AirAsia X got its ASL from FlyAsianXpress (FAX)" said a source.

FAX was an airline set up by Fernandes to operate several domestic services following MAS' withdrawal of MAS from rural routes in Sabah and Sarawak in 2006.

"When FAX's rural air services were taken over by MASWings, the corporate name was changed to AirAsia X which switched its focus to a new market, namely low-cost long-haul flights," the source said.

In a statement yesterday, MAS group CEO Ahmad Jauhari Yahya confirmed Leong's resignation, saying the latter will be replaced by Ignatius Ong Ming Choy as COO of its short-haul operations, effective Dec 10.

Leong will remain in MAS Group until Dec 31, and will be joining Destination Resorts and Hotels (DRH) a unit of Khazanah National Bhd, as COO.

The statement made no mention of whether the Firefly operations and brand name will be retained.

This is not the first time the future of Firefly has been in question. The unprecedented tie-up between MAS and rivals AirAsia and AirAsia X last August had raised questions over the role the community airline will play.

Last month, Firefly's jet services operated by four Boeing 737-800s and one 737-400 between the KL International Airport (KLIA) and Sabah and Sarawak were taken over by MAS. It is understood that passenger traffic at Subang's Sultan Abdul Aziz Shah Airport, which is one of Firefly's bases fell by some 30% in September from July, following the move.

Sources said the move was unsurprising as Firefly's jet services had posed a direct threat to AirAsia's business.

"For MAS it didn't matter because Firefly was still part of the group, but not for AirAsia. That's why, following the MAS-AirAsia share-swap deal, the first thing that was cut was Firefly's jet services," said a source.

Still, some quarters are questioning MAS' decision to let Leong go when he has been instrumental in the success of Firefly and turning a profit.

Last year, Firefly reported double-digit growth in net profit, carrying 1.35 million passengers.

"It (also) does not make sense to turn Firefly into a premium full-service airline when it is solely operating turboprops. As it is, the perception of turboprop is that it is second class to jet, so why would people pay premium for second-class travel?" said a source.

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