Controversial MAS-AirAsia share swap scrapped
MAS parent Khazanah Nasional Bhd said it terminated the share swap with AirAsia majority shareholder Tune Air Sdn Bhd on 30 April.
May 3, 2012
The eight-month old, controversial share swap between Malaysia Airlines (MAS) and AirAsia majority shareholder Tune Air Sdn Bhd put into place with the aim of strengthening Malaysia’s aviation sector has been ditched, with MAS parent Khazanah Nasional Bhd saying it terminated the share swap on 30 April.
Under the original agreement aimed at avoiding outright competition between the ailing legacy carrier and the upstart low cost carrier, MAS was to be only a full-service premium carrier, while AirAsia and AirAsia X fulfilled the low-cost regional and medium-to-long-haul markets. Part of the deal involved Khazanah and Tune Air entering into a share swap agreement so that there would be cross-holding with Tune Air taking a 20.5 per cent stake in MAS and Khazanah 10 per cent in AirAsia. AirAsia was in essence the white knight come to rescue Malaysia Airlines in distress, a deal what gave Fernandes a bigger say in how the aviation landscape would shape up in Malaysia and beyond for both carriers, but in particular the seriously ailing MAS.
The collaboration pact between the airlines inked in August last year will stay but with modifications including agreements to jointly explore and set up joint-venture companies to provide aircraft component maintenance support and repair services and to set up a special-purpose vehicle (SPV) for procurement with the aim of saving costs. They will also continue to explore cooperation in the area of training. But the new collaboration terms allow the airlines to enter each other’s domain if they wish to.