As all indicators point to an insolvent or near insolvent behemoth of the skies, the question arises as to what went so horribly wrong with Air Asia; the darling of the skies, of Mahathirism and of the dynamics of ‘The Asian way’ in the Asian century.

As desperate appeals for funding pour in from the airline’s chief executive to its customers, some of them indicate how desperate the airlines financial situation is.

Travelers are being asked to withhold exercising their rights to a refund for services not provided by the airline. Auditors, creditors, analysts and shareholders are beginning to look more closely into the companies recent and historic annual reports, its accounts and to the inexplicably narrow margins (for error) and contingencies factored into the company’s accounts.

As well they are looking into its operating revenues, its earnings, its income and its cash flows for over the past 5 years which are scarce to obtain in any meaningful detail.

Was AirAsia reporting fiction and padding its accounts in its periodical reports? Me thinks that this is a real possibility. Was AirAsia in fact converting the debt of some of its subsidiaries into assets? Was it reporting earnings earned but not received and possibly impossible to recover as assets?


What on earth was the airline investing its surpluses in (if they did exist in recent times) ? Who funded the purchase of prestige non core assets such as an English League soccer club? There were other prestige investments and political donations which were neither core businesses nor beneficial to an airline operating in a highly volatile unstable political environment and market as Malaysia and the world is today.

The real fear today is that if the airline, that came into existence courtesy of Dr. Mahathir’s largesse fails, it will have repercussions reaching far beyond Malaysia’s shores.

AirAsia’s failure will blow the lid off the standards of Malaysia’s financial reporting, the credibility of the Bursa Malaysia and yes the credibility of Bank Negara Malaysia too. It will also uncover the practice of bribery, graft and corruption unseen since the Lockheed scandal of the 1970’s which brought down governments and the all powerful Japanese Prime minister of his time, Kakuei Tanaka.


Bank Negara is the gatekeeper of Malaysia’s entire financial system (if you could call it that). The recent revelation of its failures in compliance falling squarely at the feet of its forme Chair Zeti Akhtar has a nexus to the myriad of financial disasters that has plagued Malaysia for over 2 decades covered up by the Bank.

A convenient scapegoat and distraction to the Titanic of Malaysia’s “Tiger Economy” of the Mahathir era is the trial of Datuk Seri Najib Razak, a former Prime Minister of Malaysia.

It was indeed a tangled web they wove when they practiced how to deceive. That web of deception is coming apart at the seams. Is it going to be Zeti or Fernandez’s AirAsia that will be the iceberg to sink Malaysia’s run as a “Tiger economy?”

AirAsia, the poster child of ‘wunderkind’ Tony Fernandez is beginning to not only come apart at the seams but it also threatens to spill the beans on the entire money merry go round from treasury, Petronas and other government sources of funding to an elite exclusive coterie of recipients all with a direct link to not only Dr. Mahathir but also to UMNO Baru.

It appears there was good reason for economist prince Tunku Razaleigh Hamzah to get out of the way when the wheels of UMNO Baru’s juggernaut began to fall off in the farcical games of prime ministerial musical chairs played out in parliament recently.

Already under the spotlight, Bank Negara, and revelations about its former Chair Zeti Akhtar and her failures during her term as chair at the Bank have begun to shake Malaysia’s “Tiger economy” to its very foundations.

Added to the fuel of Zeti Akhtar’s scandalous failures at Bank Negara, the spark of AirAsia’s current financial problems, the demand for clarity and transparency on the situation relating to many of Malaysia’s top corporations that comprise the Bursa Index is beginning to heat up.

The Bursa like Zeti was asleep at the wheel at the AirAsia bus from all accounts.


The inevitable to the Malaysian economy and the Ringgit cannot be put off forever with leggy young nubiles and a hot PR campaign anymore. Such campaigns and self promoting dazzling circuses can’t pay the rent, the lease payments on a fleet of expensive aircraft, wages of a few thousand employees, contractors, merchant services, fuel bills and government taxes. And it hasn’t.

This simply points to an insolvent airline flying on a wing and a prayer, hope and promises alone.

How Serious is government and how experienced are its advisors in preparing it for a tsunami which will consume the entire Malaysian economy in one large wave?

A good guess is that the government and its advisors are not up to scratch to deal with these dominoes when and not AirAsia falls. This will be worse than what hit Malaysia’s non banking financial sector in 1991 when Anwar was minister of finance. The world today is not the same place it was in 1991.

As the heat of Air Asia’s financial troubles is turned up with Ernst & Young’s qualification of the company’s reports and its financial condition, a requiem can be heard in the background by all, except AirAsia’s biggest shareholders, its founder and his partner.

Perhaps this is because they have their proverbial headphones on and eyes shut as a distraction to what’s about to befall them.


The departure of Sir Richard Branson’s group from the AirAsia shareholder register in 2012 should have sounded warning bells about the management style and practices of the highly geared overly ambitious AirAsia. It did not.

There was nothing like the fanfare that greeted Virgin’s entry into the airline’s share register in 2007 when Branson’s Virgin divested its interests in AirAsia. Branson’s executives were tight lipped about Virgins exit. But the Malaysian government and its Bursa preferred catwalks to compliance, prestige to pragmatism, pandering to the airline, instead of ordering an investigation into its practices and finances then.

They continued to pamper the airline pretending all was well with it without investigating the possibility that something was not quite right with the company.

The Airline concealed its financial problems by threatening to move its head quarters and operational hub offshore. They were deft at playing musical chairs with their finances and brinkmanship with regulators.

Leaving aside the Bank Bumi scandal and the the Malaysian Housing collapse of 1998, this is the biggest economic and reputational threat hanging over corporate Malaysia, its government and its reputation as a place to do business in.

When AirAsia collapses as is expected by the financial community it will bring the economy down with it worse than what Covid has done to stronger more robust economies worldwide.

The real problems that Mahathir and Anwar distracted the world with so successfully by drumming up the 1MDB and Najib circus is about to come undone. And with it will be recriminations of a kind no one has seen before.


As was the case with previous financial disasters, the accounting and banking profession have a lot to answer for it if a crash of this airline occurs. Each of Malaysia’s legal and accounting peak professional bodies must be brought to account for these failures. They were not brought to account during the Bank Bumi, Maminco, the Housing sector collapse, the non banking financial sector collapses scandals previously and their vices were celebrated as a virtue then. Why should it be any different now?

Let’s hope Air Asia can survive as it has in the past and continue to fly on a wing and a prayer. Lots of prayers.

The Malaysian economy is more and more appearing to be like that proverbial house built on sand. Shifting sands that is. It is not Najib they ought to worry about. It is those who painted pictures of Dr. Mahathir on planes using shareholder funds that is the real concern.

When AirAsia collapses as it is expected to, the Malaysian Ringgit will go down with it as will those companies built on the largesse of Dr. Mahathir and Anwar Ibrahim, their padded revenues and earnings, their off balance sheet debts and liabilities leaving Malaysia in a mess only a tsunami could otherwise leave it in.

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