Further developments are expected in a landmark share swap between national carrier Malaysia Airlines and low-cost carrier Air Asia.
Major shareholders Khazanah Nasional Bhd (MAS) and Tune Air Sdn Bhd (AirAsia) are close to announcing a deal which will turn the long-time rivals into partners.
According to sources, Khazanah will acquire a 10 percent stake in AirAsia from Tune Air, a private vehicle controlled by Tony Fernandes and Kamarudin Meranun.
Tune Air could end up with a 20 percent stake in the national carrier.
Khazanah, which has a controlling stake of 69 percent in MAS, will continue to remain the single largest shareholder in the national airline.
Under the agreement, AirAsia would get two MAS board seats for the CEO and deputy.
THE MOLE’S View: Malaysia Airlines has moved quickly to shore up its defences ahead of moves by both Singapore Airlines and Qantas to launch low-cost subsidiaries in Asia.
If, as mooted, AirAsia takes over MAS’s domestic operations, and MAS concentrates on long-haul routes, competition between the two – which to date has driven low fares in the region – may be compromised.
Even so, it is a remarkable deal for Tony Fernandes and Air Asia: from upstart budget airline to partner of the national carrier in just a few years is quite a feat and flies in the face of those who once doubted that low cost carriers had any sort of future.
