Malaysia’s major airlines join forces

Malaysia’s major airlines join forces

Malaysia’s biggest airlines have announced plans to enter a collaboration agreement. National carrier Malaysian Airline (MAS) and its low-cost rivals, AirAsia and AirAsia X, have entered into a new partnership which will see each party take a stake in the other’s business. Tune Air Bhd and Khazanah Nasional Bhd, the major shareholders of AirAsia and MAS respectively, have agreed to acquire from each other existing shares of both companies. As a result, Tune will hold 20.5% of shares in MAS and Khazanah will hold 10% of shares in AirAsia. Khazanah will continue to be the single largest and major shareholder of MAS. In addition, Khazanah proposes to acquire 10% of shares in AirAsia X. On a practical level, the airlines said they intend to review their network services, with plans to combine their offerings with interline agreements on certain routes, including new destinations. Other future areas of cooperation include training, maintenance, catering and cargo services. As a result, MAS said that Firefly – its existing low-cost carrier subsidiary – will be remodelled into a full-service regional carrier. “By focusing on core competencies, it will enable both parties to increase product offerings to our respective customers,” said Dr Tony Fernandes, CEO of AirAsia Group. “Our business model requires us to continue to reduce prices in order to increase volumes for consumers in the low-cost travel segment which we can now focus on in a more significant way”. All tie-ups are subject to completion of a full anti-trust review by all three companies.

Mark Elliott
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Mark Elliott
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