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Pest of Air Asia

By | November 2010
Page 1 of 2
POLITICAL ASPECTS
• Political uncertainty in Malaysia with Prime Minister Abdullah Badawi set to step down in March 2009. • Deputy Prime Minister Najib Razak is expected to take over the ruling-coalition party, but with a cloud of allegations. • Political unrest in Thailand recently when anti-government protesters recently blocked flights for a week at Bangkok's main airports. • ASEAN nations have been pushing Indonesia to scrap its Rp.1 million ‘Fiscal’ charge to all Indonesian citizens and expatriates when leaving the Republic of Indonesia either for business or tourism. • Resurgence of violence in Southern Thailand – Northern Malaysian border. • Malaysia granted exploration rights in oil-rich waters off the coast of Borneo; increased tensions with Indonesia. • Terrorism has occurred in Thailand and Indonesia; most notably the Bali bomb of 2002. ECONOMIC ASPECTS

• AirAsia holds 49% of Thai AirAsia with 1% held by a Thai individual. The remaining 50% is held by Shin Corp., owned by the former Thailand prime minister, Thaksin Shinawatra. Shin Corp. has financial strength, synergy in information technology and telecommunications, which support AirAsia Internet and mobile phone bookings. • National trends: - Malaysia's economy may expand as little as 4 percent in 2009, growth will probably be between 5 percent and 5.5 percent this year, below the official 2008 forecast of 5.7 percent. (v) - Real GDP % Growth forecast is from 5.1 in 2008 to 1.4 in 2009. (vi) - Interest rates % dropped from 3.5 in Jan.2008 to 2% in Jan.2009. (vii) - The inflation rate may fall below 4 percent before the second half of 2009. (viii) - Unemployment has remained constant at an average of 3.6% in July 2008 to 3.1% in Oct.2008. However, the global credit crisis has raised fears that “the unemployment rate could double to 6 per cent by 2010 if global demand remains weak”. (ix) • International trends:

- Malaysia ranks 20th for its ease of doing business out of a total of 181 economies...

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