Malaysian authorities have fined Malaysia Airlines and AirAsia for anti-competitive behavior.
The Malaysia Competition Commission said in a statement that the country’s two dominant carriers would each have to pay a 10 million ringgit (US$3 million) penalty for collaborating to integrate some routes in which they had earlier competed.
"When businesses agree to share markets, they are agreeing to stop competing, at the expense of the consumers," said the commission.
Budget carrier AirAsia agreed in August 2011 to hand over a 10% holding to a state investment fund in exchange for a 20.5% stake in the ailing flag-carrier Malaysia Airlines.
The deal was aimed in part at eliminating mutually harmful competition on some routes.
But it was unwound just eight months later following pressure from Malaysia Airlines’ employees union, which feared it could result in possible job losses and other cost-cutting at the national carrier.
AirAsia said in a statement that it would "vigorously" defend itself against the commission’s findings, saying it had taken steps to ensure that the deal complied with the law "in every respect".
Maybank Investment Bank Research analyst Mohshin Aziz said both AirAsia and MAS could "swallow the RM10m fine without a dent to their operations and balance sheet".
