MAS losing money: QPR sponsorship a ‘good deal’ for MAS

 A move that can be question?
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KUALA LUMPUR: The recently inked home jersey sponsorship between Malaysian Airline System Bhd (MAS) with Barclays Premier League club Queens Park Rangers (QPR) is a “good deal” for the national carrier, said Khazanah Nasional Bhd managing director Tan Sri Azman Mokhtar.

Azman’s comments come on the back of MAS getting flak for the sponsorship arrangement.

Much of the brickbats stem from the national carrier looking at such a sponsorship after bleeding a net loss of over RM520 million in 2QFY11 ended June 30.

“We felt that we got a good deal that stands on its own commercially. I think all the numbers are there, we (just need to) add value,” Azman told newsmen at the sidelines of Forbes Global CEO Conference yesterday. Khazanah owns a 69.5% stake in MAS.

In a statement yesterday, MAS’ top official said the latest sponsorship enables the national carrier to reinforce its global full-service presence and premium franchise via football fans from Europe, the Americas, Asia-Pacific, Australia and other regions.

“It also celebrates MAS’ recent collaboration framework with AirAsia,” said MAS executive director Mohd Rashdan Md Yusof.

QPR, however, is among the less celebrated teams in the Barclay’s Premier League (BPL). After a 15-year absence the team is now back in the top flight of English football but is unlikely to impress.

As an indication of its stature, QPR’s ground Loftus Road has a capacity of only some 18,500, in contrast to other teams which have stadiums with capacities exceeding 50,000 spectators. Other teams MAS was linked to were much more well known with larger followings.

MAS was the official air charterer of Manchester United’s Asian Tour in 2005 and 2007.  It was also the official air charterer for Chelsea’s Asian Tour in 2008 and this year. Arsenal had also travelled on MAS charter flights for its Asian tour this year.

Other issues with regard to transparency have irked market watchers as well. Under this plan, MAS will sponsor the jerseys of QPR during its BPL home matches for the 2011/12 and 2012/13 seasons while budget airline AirAsia Bhd will sponsor QPR’s away match and “third” jerseys for the two seasons.

MAS has yet to disclose details of the sponsorship deal. Based on unconfirmed reports, MAS may have committed over £3 million (RM14.6 million) for the QPR jersey sponsorship.

In contrast, AirAsia announced to Bursa Malaysia on Monday that it had committed some £500,000 for the QPR sponsorship and highlighted that the transaction was a related party transaction (RPT) given that Tan Sri Tony Fernandes has interest in both AirAsia and QPR.

Interestingly apart from being the “away shirt” sponsor of QPR, AirAsia will also receive the rights to advertise at the QPR’s Loftus Road Stadium and get match tickets and hospitality benefits.

MAS, however, has kept mum and did not announce the QPR sponsorship deal to Bursa, and said the transaction is not considered an RPT despite Fernandes owning a stake in MAS via Tune Air.

In a response to The Edge Financial Daily’s queries, MAS responded: “The sponsorship quantum is a matter agreed between QPR and MAS.

“MAS did not make an announcement to Bursa yesterday as the QPR transaction does not fall under the categories for RPT requiring an announcement.”

These sponsorships issues came just a month after MAS and AirAsia shareholders agreed to swap shares under a deal that will pave way for a tie-up between the two airlines.

Under the deal, Khazanah has taken up a 10% stake in AirAsia while Tune Air Sdn Bhd, which owns some 23% in AirAsia, has subscribed to 20.5% of MAS’ shares.

Separately, at the sidelines of the Forbes conference, Fernandes said: “Malaysia has to change its way of thinking and stop this defeatist attitude... If we continue to not brand ourselves we might as well allow a foreign airline to be the national carrier of this country.

“We have built ourselves by investing in the brand and if we really want to be a global leader and have brands that are globally recognised (then) we have to invest. It’s a tiny investment in relation to what you want to build,” added Fernandes.

Nevertheless, the question remains: will MAS be able to raise its profile with the sponsorship and how does such move fit in its strategy?

Source: The edge