Relax - AirAsia wants out of joint ventures with MAS: Paper

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KUALA LUMPUR - Low-cost carrier AirAsia Bhd wants to opt out of all joint venture agreements with national carrier Malaysia Airlines (MAS), Malaysia's Business Times reported a source as saying.

AirAsia decided at a board meeting last week that it would seek to terminate its agreements with MAS soon, according to the source.

AirAsia group chief executive officer (CEO) Tony Fernandes said no comment when queried about the matter through text messages, while calls and text messages to AirAsia Malaysia CEO Aireen Omar went unanswered.

MAS chief executive officer Ahmad Jauhari Yahya did not respond to a text message, the Malaysian paper reported.

A termination of the memorandums of understanding (MOUs) between AirAsia Bhd and MAS would effectively wipe out the remnants of a deal between Khazanah Nasional Bhd and Tune Air Sdn Bhd that had gone awry.

In August 2011, Khazanah and Tune Air signed a deal to swap part of its holdings in MAS and AirAsia respectively, in a move to facilitate a collaboration between the two carriers. In May 2 however, the deal was cancelled following an uproar by MAS employees.

A supplemental agreement between AirAsia and MAS instead took its place as part of a move to salvage its initial collaboration plans.

Two MOUs were signed on May 2, 2012 whereby one was to focus on the setting-up of a joint venture company to provide aircraft component maintenance support and repair services.

Another was for the establishment of a special purpose vehicle by MAS, AirAsia, and AirAsia X to improve value for money and to increase competitiveness through procurement synergies.

An analyst, who declined to be named, said the news of a possible cancellation of the joint ventures between MAS and AirAsia is not surprising.

He said MAS employees are reluctant to cooperate with AirAsia, so it would have been difficult for them to work together. "The JVs would have benefited them both though," said the analyst.

The agreements between AirAsia and Malaysia allow for a termination by mutual agreement any time within a six-month period from the date of the signing.

Such a termination however, will not release a lock- up period of six months that disallows both parties from talking to, negotiating or cooperating with any other parties.

This article was first published in The Business Times.

AirAsia wants out of joint ventures with MAS: Paper

The Business Times | Fri, Jul 27 2012

Analyst says MAS employees reluctant to work with AirAsia
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