MD of Malaysia’s latest airline talks about its finances and investors

The Bombardier CS 100 airplane is displayed at the company

PETALING JAYA: Fly Mojo Sdn Bhd, Malaysia’s latest addition to the growing number of companies in the airline industry, dismissed concerns over its ability to start and sustain operations and poured cold water on speculation that it was owned by influential figures.

Managing director Datuk Janardhanan Gopala Krishnan said that the company has lined up adequate cash to fund its operations and it would come from seven investors including himself.

“All the investors are Malaysians and it is a mix of four individuals and two corporates and me. They believe in the concept and idea and are excited about Fly Mojo’s potential.

“The available cash is about RM50mil now. We would not have made the announcement last week if the funding was not covered... it would be foolish to do that,” Janardhanan said in an interview with StarBiz.

The funds for operations does not include the cost of procuring aircraft. For aircraft purchases, it is in talks with aircraft lessors to have a sale and leaseback arrangement for the 20 units of CS100 jets it had placed orders for with Bombardier last week.

Janardhanan scoffed at suggestions that he was the “front man” for several tycoons and prominent names that have been have been linked to him and Fly Mojo.

The list includes Tan Sri Ravi Menon who is the major shareholder of a company operating Subang Skypark, Johor’s Tengku Makhota, billionaire T. Ananda Krishnan, and MBf shareholder Tan Sri Mogan Lourderain.

Even the government has been linked by the virtue that Fly Mojo’s chairman is Datuk Seri Alies Anor, the former political secretary to Prime Minister.

Ravi Menon and Lourderain are people Janardhanan had worked for in the past. He was with Subang Skypark Sdn Bhd from 2007 to 2011 and before that with MBf group. He had also worked previously in Shell Malaysia, Azmi & Co Building Services Sdn Bhd and also in London for nearly five years.

“Neither of them are involved. I am also not the front man for anyone. It is an idea but I had worked with several other people, some have come and left. We went through the mill to be here,” he said.

“For now I own 90% of Fly Mojo and Ismail Hue Kor Ming holds the remaining 10%. We will issue new shares to investors and this exercise will be completed by year-end,” Janardharan said but declined to name the investors.

Fly Mojo plans to launch flymojo airline in October this year with bases in Senai and Kota Kinabalu airports. Last week it made a major announcement of placing orders worth US$1.47bil (RM5.5bil) with aircraft maker Bombardier for 20 CS100 that comes with an option for another 20, with the total value exceeding US$2.94bil.

Flymojo, which is positioning itself to being a regional airline, enters a market that aviation experts believe is already overcrowded.

An aviation analyst from Singapore said: “There is no room in the market for another carrier as it is already oversupplied. The niche flymojo is pursuing can easily be filled by AirAsia, Malindo Air or Firefly, which can pursue strategic and aggressive expansion into Senai or wherever flymojo goes and out-muscle the new competitor.”

AirAsia’s major shareholder and head honcho Tan Sri Tony Fernandes questioned the rationale of another licence being issued as he felt that too much state money was being poured into the aviation industry where there was already six players in the country.

“While we believe in free and fair competition, Malaysia needs a clear aviation policy as seen from the closure of flying school because too many licences were issued in the first place.

“We are concerned that too much state money is lost in aviation and I question the rational of another airline when the CEO of Malaysia Airlines (MAS) is just beginning on probably the last attempt to get MAS fixed.

“We need MAS to stand on its own two feet and not get any more state aid. We are not sure if any new airlines will help that,” Fernandes said.

He also said there was no problem in having a new airline so long as there was no subsidy and unfair treatment given.

MAS chairman Tan Sri Md Nor Yusof added that “we are quite open, if we accept that aviation presents a new growth sector for the Malaysian economy with a wide reaching economic value chain. Currently it was barely scratching the full potential vis-à-vis the Asean-China-India nexus metamorphosis, but then we should not rush to conclusions.

“Quite often those who dare the contrarian move would be one to benefit from being outrageous and often at the expanse of the incumbent. The incumbent is not expected to just cry and watch that happening,” Md Nor said.

Going by what the two chiefs are saying they are not going to let flymojo eat into their turf and Malindo Air CEO Chandran Rama Muthy adds that “while the entry of flymojo was good for the industry, especially consumers, it will certainly intensify competition for the players”.

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