KUALA LUMPUR – The director of Pos Malaysia and Pos Asia Cargo Express (Pos ACE) should be given free hand to decide on Asia Cargo Network’s (ACN) proposed takeover of the Pos Asia Cargo Express (Pos ACE) operations and not by an individual who wields certain influence.
According to an industry source today, it is also believed that such an arrangement is not following proper governance process.
“This matter should be a decision by the Board of Directors of Pos Malaysia and Pos ACE, not an individual who has influence. We are living in the era of “Malaysia Baharu”.
“This action doesn’t reflect the spirit. Is it a good move by Pos Malaysia? The public has the right to know as they also have interests in this company,” he said.
The source claimed that the individual, who is believed to be the advisor to Tan Sri Syed Mokhtar Al-Bukhary, had instructed the management of Pos Malaysia to push for the deal in which ACN would take over the freighter business operations by the end of November 2019, which is currently controlled by Pos Malaysia subsidiary.
Syed Mokhtar Al-Bukhary is a major shareholder of Pos Malaysia who owns 32.2% of the total shares.
ACN is an aircraft consultant/broker based in Kuala Lumpur. Both the Managing Director and Director Partner, Marco Isaac and Gibbrael Isaac own the Indonesian cargo carrier, TRI MG Airlines. Pos ACE, meanwhile, is a subsidiary of Pos Malaysia that provides freighter service to East Malaysia for postal loads.
For the past financial year, Pos ACE had incurred losses of about RM56 million, mostly due to the return of aircrafts following the end of lease. This had also resulted in a huge financial impact on Pos Malaysia by recording the first loss in a decade.
It was believed that the initial arrangement was for ACN to be a new aircraft lessor to Pos ACE by providing two Boeing 737-400F aircrafts on 30th November 2018 for the first aircraft and Jan 2019 for the second aircraft.
However, due to several major airworthiness issues that should be under the responsibility of ACN to rectify, the aircrafts are still pending clearance by the relevant authorities.
To date, Pos ACE is still managing the operation of transporting the postal loads to East Malaysia using only a single aircraft, which is on a wet lease arrangement with MyJet.
The source outlined a few reasons why the proposed takeover of Pos ACE by ACN could be detrimental to Pos Malaysia.
- The high cost of aircraft return exercise and prolong induction of aircraft replacement had caused a few management staff from Pos ACE to be suspended from duty due to suspected breach of trust, forgery of aircraft lease agreement and to the extent of bribery which also involved ACN. Despite the ongoing, the takeover still persists. Although premature at this juncture, there have been several meetings to expedite the takeover, which would cause difficulties to Pos Malaysia if this case leads to a criminal conclusion.
- During the induction of the aircraft replacement pending airworthy clearance, ACN had provided two wet-lease aircrafts to support Pos ACE operations for almost a year. However, the performance of the aircrafts provided by ACN was disappointing and questionable. The after service provided by ACN was also very poor as all the technical works had been carried out by Pos ACE staff, and not by ACN. These past actions by ACN should be a warning signal to the management of Pos Malaysia to consider resuming the partnership with ACN. Handing over the operations to ACN will have an enormous negative impact to Pos Malaysia if ACN fails to carry out their duty to provide the service.
- The clearance of airworthiness is currently being carried out at a Maintenance, Repair and Overhaul (MRO) workshop in Jakarta. About 90% of the technical work has been attended to by Pos ACE and not ACN, which, incidentally does not have the capabilities or expertise to carry out all the technical tasks. This shows that ACN is not only undependable but also incompetent.
- ACN currently does not have the Air Operator Certificate (AOC), but this arrangement allows ACN to piggyback on Pos ACE’s AOC for them to carry out the operation. Such an approach by Pos Malaysia is surely risky because should there be any unforeseen circumstances occurring while under ACN, ACN can shift the fault back to Pos ACE as the AOC holder.
- This arrangement also does not comply with the Malaysian Aviation Regulations. The Civil Aviation Authority of Malaysia (CAAM) and Malaysia Aviation Commission (MAVCOM) are very clear on this — that the holder of the AOC and Air Service Permit (ASP), which both belong to Pos ACE, cannot be contracted out or outsourced to a third party. This can result in the AOC and ASP to be suspended and revoked.