MAS, AirAsia and AirAsia X Enter into Comprehensive Collaboration Framework

Malaysian Airline System, AirAsia and AirAsia X have entered into a Comprehensive Collaboration Framework (CCF) which includes a Collaboration Agreement to explore opportunities to co-operate on a broad range of areas.

To strengthen the collaboration and to establish a mutuality of interest, MAS and AirAsia are issuing free warrants to each other’s shareholders. Independent advisers will be appointed to advise minority shareholders on the proposed warrants.

A MAS shareholder will be granted approximately one warrant in AirAsia for every 30 MAS shares held while an AirAsia shareholder will be granted approximately one MAS warrant for every 10 AirAsia shares held.

In addition, Tune Air and Khazanah Nasional, the major shareholders of AirAsia and MAS respectively, have agreed to acquire from each other existing shares of both companies. As a result, Tune will hold 20.5% of shares in MAS and Khazanah will hold 10% of shares in AirAsia. Khazanah will continue to be the single largest and major shareholder of MAS, the national flag carrier. In addition, Khazanah proposes to acquire 10% of shares in AirAsia X on terms and at a price to be mutually agreed later.

The early phase for collaboration shall focus on immediate synergy opportunities which can be realised without significant effect on any party’s operations. This means the companies will potentially be able to realize savings and increase revenues in the areas of aircraft purchasing, engineering, ground support services, cargo services, catering and training.

The agreement envisages more detailed terms of collaboration following completion of a full anti-trust review by all three companies.

The Collaboration Agreement shall remain in effect for a period of five years from the date of the Collaboration Agreement with an option for a further five-year renewal.

In addition, a Joint Collaboration Committee (JCC) has been formed to implement the Collaboration Agreement which will be chaired by MAS board member Datuk Mohamed Azman Yahya with other members including MAS Executive Director Mohammed Rashdan Mohd Yusof, AirAsia Group Chief Executive Officer Tan Sri Tony Fernandes and AirAsia Deputy Group CEO Dato’ Kamarudin Meranun.

MAS Chairman Tan Sri Md Nor Yusof said, “The signing of the Collaboration Agreement heralds an exciting new era of cooperation whereby the airlines involved will stand to gain significantly by tapping the benefits of working together. We believe that the joint collaboration will help MAS focus on our strengths in our core markets and work towards deriving higher loads and more efficient resource utilization. We will also be able to offer services in engineering and other areas to both AirAsia and AirAsia X. Firefly’s resources would be refocused to launch a new regional full service airline operation.”

AirAsia Chief Executive Officer and AirAsia X Director, Tan Sri Tony Fernandes, added, “By focusing on core competencies, it will enable both parties to increase product offerings to our respective customers. AirAsia and AirAsia X see growth opportunities in new routes and destinations. Our business model requires us to continue to reduce prices in order to increase volumes for consumers in the low cost travel segment which we can now focus on in a more significant way.” 

An advisory panel, chaired by Tun Abdullah Hj Ahmad Badawi, has also been set up to ensure that all parties involved in the CCF, operate in the interests of the public and reflects the aspirations of all consumers.

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