AirAsia is reported to be taking 20% of the equity in Malaysia Airlines in a new agreement to help the cash-strapped flag carrier. The Malaysian stock market confirmed the suspension in trading of the airlines’ shares was done at the request of the two companies but did not give any further information. The two airlines have denied the rumours of the share swap agreement, however.
The Malaysian sovereign wealth fund, Khazanah Nasional, which owns 70% of Malaysian Airlines, has confirmed it will retain its status as the flag carrier’s largest shareholder but would receive a stake in AirAsia. Tune Air – owned by AirAsia boss Tony Fernandes and a partner – owns 26% of AirAsia and will get a Malaysia Airlines stake.
MAS posted a first-quarter net loss due to rising fuel prices and a strengthening ringgit, opposed to AirAsia’s first quarter profit.
Local media reports write that the new deal will allow Malaysia Airlines and AirAsia to combine frequencies and routes, while increase their bargaining power with airports and aircraft makers.