AirAsia taken to task over NFL deal

Submitted by pekwan on Thursday, June 25th, 2009

While local sports bodies beg for money, airline sponsors American football team

Jonathan Fernandez

Thursday, June 25th, 2009 08:32:00

SPONSORED: Oakland Raiders team players posted on an aircraft

CHARITY, they say, begins at home. This, apparently does not apply to Malaysia's low budget carrier AirAsia. While its support for local sports has been largely in the form of discounted flights, the carrier is about to splash out millions in cash to an American football team in a major deal to be announced tomorrow.

Baffling is why AirAsia is even pursuing this deal - it doesn't even fly to the US and yet, is doling out cash for a sport with hardly a following in Malaysia.

Equally puzzling is how the no frills airline, which had its early success from strong Malaysian support to see a local airline make a global name, can afford to splash extravagant amounts when it owes Malaysia Airports Holdings Bhd (MAHB) RM65 million in airport tax.

Yesterday, AirAsia even admitted that it was withholding the payment unless MAHB lowered the airport charges! (See accompanying story)

Meanwhile, Malaysian sports figures said AirAsia could do a lot more to support local sports rather than be generous with foreign sponsorships.

Olympic Council of Malaysia (OCM) secretary-general Datuk Sieh Kok Chi said the carrier's support has been quite minimal so far. "At the moment, all we get are minimal rates for flights domestically and within South East Asia. There is no cash funding involved.

"But something is better than nothing. They have helped us, I don't want to be ungrateful by saying that they have not helped at all. However, I'm disappointed as I feel that they can offer much more. But we got to live with what we have."

Sieh continued by saying that OCM does not have constraints in finding sponsors, adding that AirAsia could definitely afford to be more generous.

While details are still sketchy on the National Football League (NFL) deal with the Oakland Raiders, the sponsorship is likely to be worth at least RM1 million. At the sponsorship announcement by AirAsia group chief executive officer Datuk Seri Tony Fernandes and Oakland Raiders owner Mark Davis, the airline will also unveil the Oakland Raiders livery on AirAsia's aircraft.

The event is expected to be attended by Oakland Raiders legend Ted Hendricks and famed Raiderettes (official cheerleaders of the Oakland Raiders) April Dizon, Angel McCoy and Amanda Voecks.

Contacted yesterday, Fernandes declined to say much about the deal.

"There will be a Press conference on Friday (tomorrow) and it will not be fair to others if I respond (to your questions). Everything will be revealed on that day," said Fernandes, who turned AirAsia into Asia's No 1 low budget carrier. AirAsia has expanded its routes outside Asia to include Australia and London. It had announced in March that it was looking at the US and Middle East sectors as well.

And one way the carrier has made headway in globalising its brand name is by involving itself in sports sponsorships - mainly overseas.

Among the millions AirAsia has pumped for international presence includes a reportedly S$1million (RM2.3m) sponsorship for a basketball team in Singapore called Singapore Slingers, which takes part in the National Basketball League.

While the value of its other major sponsorship deals were not revealed, the endorsement of professional referees in the English Premier League, the AT&T Williams team in Formula One, and now with Oakland Raiders, run into millions.

To get an idea of just how much money is being splurged, AirAsia had earlier this year flirted with the idea of being the jersey sponsors for Manchester United - in a deal which would have cost a staggering US$100m (RM340m).

Even a football team in Thailand received three million bahts (RM300,000) in the form of travel, a privilege the Olympic Council of Malaysia (OCM) enjoys with the carrier.

AirAsia was also the main sponsors for the Asia Cup hockey tourney in Kuantan, for which it reportedly provided RM500,000.

Local sports not good enough...

AZZUDIN: AirAsia has contributed a substantial amount to FAM

CASH-rich AirAsia can do a lot more to support local sports rather than being generous with sponsorships overseas, local stalwarts say.

Football Association of Malaysia (FAM) general secretary Datuk Azzudin Ahmad said: “AirAsia has helped us. It provided minimal rates for all the teams from the Malaysian League. I can’t give any figures but all I can say is that it has contributed a substantial amount to FAM.”

Asked whether AirAsia could do more for Malaysian sports, he said: “Of course it can! If you look at what it has done for the English Premier League, the support for us is not even worth a mention.”

For the lack of financial support, at least three local soccer teams have hit the limelight recently for the wrong reasons.

The Perlis Football Association is almost bankrupt.

MyTeam is disbanding without any sponsors and some Malacca soccer players claim their salaries have not
been paid for two years.

This financial malady has been the bane of local soccer clubs for some years now and if more local firms follow AirAsia’s example of focusing on overseas sponsorships, the outlook for sports in Malaysia remains grim.

Hockey too has been facing money problems while the National Sports Council is badly in need of cash infusion.

Amidst this bleak landscape, several corporate bodies have stood out as shining examples for supporting local sports. Among them are CIMB for squash and Nestle for schoollevel sports.

Comments

Air Asia is doing what they deemed best for them. It is their perogative. Sponsorhips is not one way traffic. What do the sponsor gets in return is a key factor in deciding who to sponsor. It should not be taken as charity. It is all about maximizing your dollar. Do not dump your money to sports bodies that can't even manage their finances well. Only when local sports bodies improve their management then i foresee Air Asia will come in to support.

Submitted by Waynaldo on Sunday, July 5th, 2009.

Submitted by Waynaldo on Sunday, July 5th, 2009.

Air Asia has every right to do as they please. Its their money. Stop being hyprocrites. If you claim what Air Asia is doing is wrong, then look at yourself. Look at Malaysians in general. How many Malaysians buy property overseas and not in Malaysia? How many Malaysians keep hefty savings in overseas banks and not in Malaysian banks? How many Malaysians get medical treatment overseas when the same treatment is available here? How many Malaysians study overseas when the similar course is available in Malaysia? How many Malaysians drive non Malaysian cars? The take home lesson is, dont bite on the hand that feeds you. Air Asia is doing enough for Malaysia. Its time we stop sucking it dry at every opportunity.

Submitted by Murali on Thursday, July 2nd, 2009.

Submitted by Murali on Thursday, July 2nd, 2009.

It doesn't matter to me where AirAsia chooses to place it's money, who it wants to sponsor. But I certainly hope that one day AirAsia will sponsor a run than runners can just go and have a good run and get a nice medal for their efforts. We runners have been generous so far and cough up hard-earned money to give to charities to run and put in the running effort to boot! How about a Nike AirAsia marathon, covering 21km and 10km and family run as well. I'm sure the response would be fantastic and do its part in the 1Malaysia concept. Tq.

Submitted by Ikan Sepilar on Wednesday, July 1st, 2009.

Submitted by Ikan Sepilar on Wednesday, July 1st, 2009.

Air Asia is borrowing money by the billions of US Dollars for the planes that they are buying. where do you think the lenders are coming from? Malaysia? What sports do you think these lenders are watching? Badminton? Hockey? Sepak Takraw maybe? Or the Malaysian soccer League maybe? Wake up you sports managers. The reason you speak as you do is all that you are good for is to involve yourself in the administration of sports. I cannot expect you to think beyond what you have said. That does not mean what you have said is of no value. Sure it does. But it has zero value for the entire business of Air Asia. Right now, Air Asia's hopes for fly higher and further rest more with American football than all the sporting fraternity of Malaysia!!

Submitted by Paul Warren on Wednesday, July 1st, 2009.

Submitted by Paul Warren on Wednesday, July 1st, 2009.

Air Asia knows what they are doing. They are running a business not a charitable organization. I think the writer should do more research before making unjustifiable complains even questioning how they should run their business. As for local sports .......? Come on ask them to clean up their acts first and don't blame others for your lousy perforamnce. Except for a few, I wouldn't sponsor any of our local sports at this present scenario.

Submitted by Anonymous on Tuesday, June 30th, 2009.

Submitted by Anonymous on Tuesday, June 30th, 2009.

Way to go AIR ASIA!!! Soar to a greater heights!

Submitted by sillylupie on Monday, June 29th, 2009.

Submitted by sillylupie on Monday, June 29th, 2009.

First of all, understand what branding means. Branding is about growing the value of your brand and one way of doing so is through sponsorship. Your brand grows when you associate it with something bigger, well known and is popular, not forgetting something that elicits positive response as well. AirAsia is looking to expand into the American market and what better way to do so other than by associating themselves with a culture that is truly American? Besides, AirAsia is not beholden to contribute juz because they are a Malaysian company. If I remember correctly, nobody gave them any crutches to grow, they made it on their own despite the obvious obstacles put forth. Your article insinuates that AirAsia had done nothing when in fact judging by the comments itself we can see that they indeed had gotten contribution in one way or another. How shameless of them to say "they could have done more". FIrst improve the quality of the sports and if you are truly deserving of the money, not just AirAsia, any company will come your way. Why blame AirAsia for something that is not their mistake? Totally ridiculous!

Submitted by Dheepan on Sunday, June 28th, 2009.

Submitted by Dheepan on Sunday, June 28th, 2009.

I didn't know Malaysia had sports, let alone knew what the word means. They obviously aren't good sports about this synergistic move by the two organizations. The should be happy to be representing a team as storied as the Oakland Raiders. After all I would much rather have Hawaiian Airlines as the partner who did this. Hawaii is much more of pleasant place to visit on vacation. Perhaps Malyasians don't want the publicity which would lead to more tourism. Nonetheless the plane looks great. I hope Hawaiian airlines doesn't raise their fares as a result of this. I love traveling to Hawaii almost as much as I love my Raiders.

Submitted by Raiderref on Friday, June 26th, 2009.

Submitted by Raiderref on Friday, June 26th, 2009.

The article is incorrect in stating that Mark Davis is the owner of the Oakland Raiders. He is the owner's son. Allen "Al" Davis is the owner of the Oakland Raiders. More correctly, since the Raiders is a partnership, Al is the managing general partner (even though he does not own the majority percentage of the partnership).

Submitted by OakRaidFan on Friday, June 26th, 2009.

Submitted by OakRaidFan on Friday, June 26th, 2009.

I BELIEVE THAT AIR ASIA KNOWS THE FUTURE OF THE NFL IS THE "RAIDERS". THE RAIDERS HAVE BEEN ONE OF THE MOST DOMINANT TEAMS IN THE NFL. SURE THE LAST FEW SEASONS HAVE BEEN BAD, BUT HOW BOUT THEM COWBOYS!! THEY HAVE NOT WON A PLAYOFF GAME SINCE THE 90'S AND YET THEY ARE CONCIDERED A GOOD TEAM. RAIDERS HAVE A +.500 OVER MOST OF THE NFL,CHECK THE HISTORY. RAIDERS WILL BE BACK AND AIR ASIA KNOWS IT...."GO RAIDERS"!!!!

Submitted by skunk760 on Friday, June 26th, 2009.

Submitted by skunk760 on Friday, June 26th, 2009.

Air Asia is very smart. There are raiders fans all over the world. I am an expat that lives in Bangkok, Thailand. I am a die hard raider fan. I listen to the games online early in the morning all season. When I seen air asia might be a sponsor of the silver and black I was excited. It might bring to light or expose american football to this part of the world. And any who support the raiders get my support. And it doesn't hurt they have the cheapest flights around. Win, Lose, or Tie. Raiders til I die.

Submitted by Anonymous on Thursday, June 25th, 2009.

Submitted by Anonymous on Thursday, June 25th, 2009.

I think some of the comments here overlook the fact that AirAsia is a listed company, so it is not (and I certainly hope it isn't) driven by one person's desires and wishes. In the end, the company is responsible to its shareholders, and the company's business managers and planners should be doing things that they deem best for the long-term profitability of the company. So, maybe they know more than we do in their choice here.

Submitted by Anonymous on Thursday, June 25th, 2009.

Submitted by Anonymous on Thursday, June 25th, 2009.

Why should AirAsia sponsor local sports bodies when they have not achieved much success and are a liability to any sponsor. Local sports bodies have not been able to prove themselves. Why do local sports have to beg? Even our national airline MAS have not sponsored any sports locally or internationally. So whats the complaint about? Nobody complains about MAS which have not contributed a single sen in sports. What AirAsia is doing is to compete internationally and advertise themselves. So what they do with their money is their business. Malaysians bodies like to meddle with someother body business when they can't compete or measure with...kc

Submitted by Kelvinchan on Thursday, June 25th, 2009.

Submitted by Kelvinchan on Thursday, June 25th, 2009.

In all fairness it is entirely up to the propreitor on where he so wishes to place his money. The report asks why is Airasia forking out dough for a sport that hardly has a following here in Malaysia, so why didnt somebody ask why did Airasia put in their sponsorship for the English Premeire League?? Isnt it not the same, since that sport also "hardly" has a decent following here in Malaysia, i think we are ranked like 280 or something like that in football. If Airasia wants to sponsor Azerbaijan's Chess team or Turkey's Belly Dancing team, i think that is solely, entirely up to their BIG BOSS.

Submitted by Steppenwolf on Thursday, June 25th, 2009.

Submitted by Steppenwolf on Thursday, June 25th, 2009.

it is funny to see this contribution by airasia to NFL. first NFL is not a No1 sport in Malaysia and even in Asia. Second, Raiders contribution - maybe AirAsia got cheaper deal since this team consider one of the worst team in NFL. Finally, I don't see the benefit for the short or long term to AirAsia unless they want the right to land in USA especially Oakland airport. What even the reason, only AirAsia has the reason behind it. But it is not acceptable by Malaysia. Even hold payment to MAHB worth millions is like a threat to Airport authority! It will allow other Airline to follow AirAsia by holding up payment! Kick them out from LCCT or better still send customs and LHDN if they also hold-up payment to the government agencies!

Submitted by Anonymous on Thursday, June 25th, 2009.

Submitted by Anonymous on Thursday, June 25th, 2009.

Air Asia should pay what they owe to MAHB.Holding someone ransom is not the way to do business at home...Come on Air Asia, do your charity at home FIRST!!!!

Submitted by Anonymous on Thursday, June 25th, 2009.

Submitted by Anonymous on Thursday, June 25th, 2009.

Unless you truly understand the issues here you shouldn't make such a blanket statement. AirAsia feels that MAHB has been ripping it off with the same rents, etc as when it was located in the lavish main terminal. Don't you think the rents, etc should be less now that they're operating out of a glorified shed? AirAsia definitely does. MAHB operates under a comprehensive rental stucture at all airports. They do not take the nature of the facility provided into account. They operate this way because they have at least three dozen financial loser airports to subsidize. The airlines at KLIA, no matter what terminal they're in, provide the positive cash flow MAHB needs to keep the unprofitable airports afloat. In a free market environment, this is considered unfair, but there you go. And remember that MAHB is only the operator here, they don't own the airports, the government does.

Submitted by Anonymous on Friday, June 26th, 2009.

Submitted by Anonymous on Friday, June 26th, 2009.

personally i felt that business wise AirAsia make a good decision becuz the US route will be starting soon so it's time to promote the brand over there. Better to globalize the brand now than later, plus during tis economic situation it's reasonable to sponsor a US football team since they are in need of sponsorship and this means its a good business decision. thus, AA is actually gaining from it. AA had done enough for the local sports, by sponsoring the Asia Cup. AA need to promote their name internationally and by sponsoring local sports team it won't help their cause....tony go on!

Submitted by Anonymous on Thursday, June 25th, 2009.

Submitted by Anonymous on Thursday, June 25th, 2009.

The above plane photo was first seen here: http://www.malaysianwings.net/forum/index.php?showtopic=12587&view=findp... and here: http://www.hflight.net/forum/m-1243595743/.

Submitted by Anonymous on Thursday, June 25th, 2009.

Submitted by Anonymous on Thursday, June 25th, 2009.

I think Air Asia has done enough for the lousy local sports clubs which people don't even bother about. Air Asia is doing this to enhance their global value, not thinking locally only, because merit counts! Why don't someone ask what has MAS done? nothing! So don't complain unless you are as good as the Raiders! I think it's great that Air Asia is gonna fly to the USA soon, they are the World's Best Airline! Truly suitable to their tagline "Now Everyone Can Fly". Go Raiders and Air Asia

Submitted by Anonymous on Thursday, June 25th, 2009.

Submitted by Anonymous on Thursday, June 25th, 2009.

I'm not taking sides here, but Air Asia is not obligated to sponsor local sports associations/teams, but they still do, maybe because of social responsibility. For sure, Air Asia has weighed in the pros and cons of splashing out huge sums of money to foreign teams/sports. A great "investment" i would say, is the sponsorship for referees on BPL where AirAsia's logo is clearly visible to billions of people worldwide week in, week out.

So we should not question AirAsia's decisions when it comes to sponsorship. However, being a fan of the NFL, I do question why the association with the Oakland Raiders? Yes, they are steep in tradition (so are a lot of other NFL teams) but they are now (for many years) one of the worst teams in the NFL. A better option would be the New England Patriots or the Indianapolis Colts or the Pittsburgh Steelers. These are teams with colorful history, huge following, and world renowned. Anyway, Point is - we shouldn't question how Air Asia spends its money and we shouldn't complain of not getting enough. Beggars can't be choosers.

Submitted by Azril MD on Thursday, June 25th, 2009.

Submitted by Azril MD on Thursday, June 25th, 2009.

Yes, AirAsia is responsible to answer only to its shareholders. Nobody else. Social obligations? Sponsorship is not about social obligations. It's about good biz acumen. Social obligations is about charities and helping the needy and local sports bodies are not on the charities nor needy scale. These are government bodies run by who-knows-who.

Submitted by Ikan Sepilar on Wednesday, July 1st, 2009.

Submitted by Ikan Sepilar on Wednesday, July 1st, 2009.

Oakland was picked because it is a likely first destination in the US. Why question this decision: didn't AirAsia start supporting UK football years ago? Well before they started flying there.......but that was the goal and now they've done it. By placing a branded airplane as a "marker" on their goal of air service to the US, you can bet that within a year or two that they'll be flying there too. I don't know much about Malaysian sports teams, but this just sounds like sour grapes to me. It is a mistake to think of AirAsia as a Malaysian airline when they operate from so many countries already, with more to come. Didn't Tony say recently he wanted the airline to be seen as an ASEAN airline? It's a gutsy move and I wish them well.

Submitted by Anonymous on Friday, June 26th, 2009.

Submitted by Anonymous on Friday, June 26th, 2009.

Uh, maybe because AirAsia's flights to the US will most likely land in and take off from California? You know, an area where I guess the airline hopes to find some customers - unlike the East Coast (Pats), Rust Belt (Steelers) or Great Lakes/MidWest (Colts). True, there are two more teams in the state, but the 49ers for all their history have been even worse than the Raiders this decade in an even weaker division and the Chargers do not have the same fan following or history, even though they have been a very strong team in recent years. If it all comes down to marketing appeal between those three, you have to admit that the Raiders more than hold their own (Al Davis' recent football-related decisions aside). Not to mention that it probably ended up costing AirAsia less than trying for a contract with a team that has won a Superbowl this decade.

Submitted by Anonymouses on Friday, June 26th, 2009.

Submitted by Anonymouses on Friday, June 26th, 2009.