Government investment arm Khazanah Nasional Bhd and the founders of AirAsia Bhd inked a deal that will see Malaysia Airlines exit the low-cost segment and greater collaboration in aircraft purchasing, engineering and training between the two airlines.
“Imagine MAS during the golden age when we were truly a premium airline. This is what this deal hopefully promises,” newly-appointedMAS executive director Mohammed Rashdan Mohd.Yusof said after a news conference. Rashdan was formerly the executive director of investments for Khazanah Nasional and its nominee to the board of MAS.
Tengku Datuk Azmil Zahruddin, who resigned from his post as chief executive officer and managing director of MAS ahead of the deal, will be the executive director for investments for Khazanah Nasional, effective Sept 12. A new managing director is likely to be appointed soon.
MAS’ low-cost arm, Firefly,will become a regional premium full-service carrier, leaving AirAsia and AirAsia X as the only local players in the low-cost segment. “We have a unique service offering, which is the turboprop (aircraft) out of Subang, and there is no reason why that shouldn’t continue. “It’s not only low-cost travellers who like it, but also people in suits,” Rashdan said.
The early phase of the collaboration will focus on aircraft purchasing, engineering, ground support, cargo, catering and training.
Tune Air, a 26.28 per cent shareholder in AirAsia, agreed to take a 20.5 per cent stake in MAS in exchange for Khazanah Nasional having a 10 per cent stake in it. Under the deal, Khazanah Nasional also proposes to buy a 10 per cent stake in long-haul budget carrier AirAsia X on terms and at a price to be agreed on later.
MAS and AirAsia will issue free warrants to each other’s shareholders. A MAS shareholder will be granted one warrant in AirAsia for every 30 MAS shares held, while an AirAsia shareholder will get one MAS warrant for every 10 AirAsia shares held.
A joint collaboration committee has been formed to carry out the agreement, which will be chaired by MAS board member Datuk Azman Yahya. Other members of the committee include Rashdan, AirAsia group chief executive officer Tan Sri Tony Fernandes and its deputy group CEO, Datuk Kamarudin Meranun. An advisory panel, chaired by former prime minister Tun Abdullah Ahmad Badawi, will ensure that all parties operate in the interests of the public and reflect the aspirations of consumers.