Asia Pacific airline beckons Milton in life after ACE

Scott Deveau, Financial Post Published: Monday, March 24, 2008


ACE Aviation Holdings Inc. boss Robert Milton is apparently looking into his past to figure out what to do with his future.

Mr. Milton, who was born in Boston but raised in Singapore, revealed yesterday he is one of the founding shareholders of Aero Ventures Sdn Bhd, an Asian Pacific holding company that owns 48% of the Malaysian long-haul, low-cost carrier AirAsia X Sdn Bhd.

"My involvement with AirAsia X has provided me with the exciting opportunity to participate in the newest and most promising airline business model," Mr. Milton said in a statement from Kuala Lumpur, where he announced his "minor interest" in the holding company.

AirAsia X is a long-haul affiliate of Kuala Lumpur-based regional carrier AirAsia. While AirAsia has offered short-haul, no-frills flights in the region since the 1990s, AirAsia X is focused on expanding the model to international destinations on flights between four and eight hours. It aims eventually to connect passengers from Australia through Kuala Lumpur onward to Europe on its fleet of Airbus A330s, with London's Stansted airport in its immediate sights.

Currently AirAsia X flies from Kuala Lumpur to the Gold Coast, Australia and Hangzhou, China, since it took to the skies last November. It aims to add such places as Moscow, Dubai and Osaka, Japan.

While low-cost carriers have become entrenched in North America and Europe, they have yet to really take flight in the Asia Pacific region, according to Richard Aboulafia, an industry analyst with the Teal Group in Fairfax, Va. While most of the low-cost alternatives there, like Jetstar Asia Airways and Tiger Airways, have focused on transcontinental routes, AirAsia X is one of the first to extend the model to international routes, he added, making it a "pioneer" in the East.

Certainly demand is there. The total number of passengers in the Asia Pacific market is expected to surpass that of the U.S. domestic industry within the next five years, making it the largest individual market for air travel, according to the International Air Transport Association.

"AirAsia X is one of the more aggressive experiments," Mr. Aboulafia said. "It's like WestJet or JetBlue."

Mr. Milton joins the head of AirAsia, Malaysian entrepreneur Tony Fernandes, and a handful of other AirAsian executives and Malaysian investors, in forging Aero Ventures.

In addition to the holding company, AirAsia X has attracted such investors as Sir Richard Branson's Virgin Group, which owns 20% of the airline.

Mr. Milton's investment in the airline should be a major boost to its credibility. His experiment with ACE, the parent of Air Canada, has been lauded by industry officials since it was formed in 2004 when the airline emerged from bankruptcy protection.

After whittling down ACE's interest in Air Canada, its Jazz regional carrier, its Aeroplan frequent-flyer program and its ACTS maintenance unit, the holding company has managed to return billions of dollars in proceeds to its shareholders.

Mr. Milton has said he hopes to completely unwind ACE in the first half of this year and he told the Financial Post last summer he was considering going into private-equity investing. He has since moved his family from Montreal to London.

"I believe AirAsia X has great potential as the first truly low-cost long-haul carrier in a region which will see significant future traffic growth - an area of the world to which I also happen to have strong personal ties," Mr. Milton said yesterday.

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http://www.financialpost.com/story.html?id=396689

Sort of a slap in the face of AC employees. The guy is a real dick.

Sort of a slap in the face of AC employees. The guy is a real dick..

Why?

the holding company has managed to return billions of dollars in proceeds to its shareholders.

Hello, it's business, and at last count employees did not sign his direct deposit, the shareholders do. And should I add, there are a bunch of AC employees that have jobs. That MAY not have been the case if someone else had been at the helm.

I have to say, I am really disgusted when people lose the big picture. You have jobs and he has his. Full stop.

Cheers,

ETTW

Milton has been the best CEO Air Canada has had in decades. Unlike his predecessors, he has the spine to make tough decisions, not bend over for the legions of whiners who will always whine, not matter what.

I would reccomend picking up a copy of Miltons Book "straight from the top" I think its an excellent read and offers allot of insight into the going ons at AC over his time there. He's one sharp cookie and when he invests in Air Asia and has others like Richard Branson doing the same it might make you think twice about calling him a dick .

I read his book too and quite enjoyed it. He is an interesting guy. Some of the profit also goes to kids charities as well...

He's a pretty smart guy. Unfortunately for him he was at the helm during the merger and restructuring. These were and still are trying times for us. I can't think of any other airline that has gone through this and survived it. We all pointed the finger at him and still do for everything that goes wrong at MapleFlot. If only he could have found a way to please the employees a little more and maybe cut back on the millions he's made. We all would have had a bit more respect for him. Then again, respect from employees is not at the top of his "must have" list. Respect from peers is.

I agree with most of these posts. Like one post said, doubtful AC would have pulled outta the nosedive without Milton. Tony's point is bang on however. Anyone able to engage in intelligent debate over the AC/Milton/CCAA/Onex era has to give some credit when its due. Sometimes you have to take the good as well as the bad. After all, look at us now!

With the failure of a long-haul low cost airline, that being Oasis Hong Kong, I now wonder if maybe this is even a realistic model? I also wonder if Milton is thinking the same? Too late, from the sounds of it.

The first ones to try low cost overseas were People Express back in the seventies. It didn't work then either. Although Jet Airways of India seem to be doing ok. Too early to tell.

No surprise there. The low-cost model has been quite successful in many parts of the world, and any business leader worth his salt would see something attractive with that concept.

I've also been an airline employee who respected Milton; unfortunately, he came to AC at a rough period in the airline's history and was not able to use his full talents. Air Canada, like many former state-owned airlines, had a plethora of problems and it is difficult to change this. Sabena and Alitalia have shown that not all are able to cut the transition.

Didn't know about the book, but will try to pick up a copy next time I am in town.