AirAsia will acquire a 20.5% stake in ailing MAS under a share swap deal.
KUALA LUMPUR: Fast-growing budget airline AirAsia will acquire 20.5% of ailing flag carrier Malaysia Airlines (MAS) in a share swap that will see the fierce rivals join forces, the carriers said today.
The deal also gives Malaysia-based AirAsia CEO Tony Fernandes – who took over the no-frills carrier and turned into one of the industry’s biggest success stories – a voice in turning around loss-making MAS.
Under the deal, state investment arm Khazanah Nasional Bhd, which held nearly 70% of the national carrier before the deal, will get a reciprocal 10% stake in Tune Air, AirAsia’s parent company, the two sides said.
“As a result, Tune will hold 20.5% of shares in MAS and Khazanah will hold 10% of shares in AirAsia,” a joint statement by the parties said.
The arrangement, first reported by the local media at the weekend but only confirmed today, marks a coup for the brash Fernandes.
A separate statement by MAS said a four-person committee including Fernandes would take over management of the national carrier.
As part of that arrangement, MAS managing director Azmil Zahruddin Raja Abdul Aziz will resign to make way for the new leadership, the statement said.
Before the announcement, analysts had said the tie-up would be also be welcome news for struggling MAS.
Fernandes has been rapidly expanding AirAsia’s route system and undercutting MAS with its bargain air fares on routes in which they compete.
Sources close to the deal have said it would allow the carriers to work together to cut rising costs by sharing maintenance and bulk purchases of parts and aircraft.