The truth behind the share swap? As per now, Firefly will not fly to KLIA anymore which reduce the competition to Air Asia which will land permanently at LCCT. Firefly is a cheap low cost flight by MAS targetting no-frills flight and passengers. This is the target market for Air Asia. Having the allowance to land at KLIA is an advantage to fireflyz but now it seems that Air Asia has manipulated the tables and fireflyz might be terminated from service. This will cause fear to 20 000 employees of MAS whilst Air Asia will not be affected at all !!
Read more at Muda Tengah
AirAsia and Malaysian Airlines agree a share swap deal
Posted bbc.co.uk 10 August 2011 Last updated at 03:48 GMT
AirAsia and its rival Malaysian Airline System (MAS) have agreed a deal to swap shares in a bid to boost growth.
Tune Air, the parent company of AirAsia, will exchange 10% of AirAsia shares for 20.5% of MAS stocks with the state-owned firm Khazanah Nasional.
The two carriers said they will co-operate in areas such as purchasing planes and opening new routes.
MAS will also convert its low-cost FireFly brand to a full-service airline to avoid competition with AirAsia.
"Why do we do this? I think it will help us make a lot of money," said Tony Fernandes, the chief executive of AirAsia.
Mutual benefit?
The deal could help reposition and turn around MAS as a premier long-haul carrier” Juliana Ramli HwangDBS Vickers Research
The two carriers have been competing against each other for past decade. However, their fortunes have taken completely different paths.
While Malaysian Airlines has gone through some tough times, AirAsia has grown robustly to become the biggest low-cost carrier in Asia.
Analysts say the rise of AirAsia has intensified the two carriers' competition and rivalry.
"Malaysian airlines decided that they want to take on AirAsia directly on routes where the later flies," said Siva Govindasamy of Flight Global.
"That effectively meant price competition, which is not good for business."
Mr Govindasamy said the deal will reduce direct competition, helping both airlines to concentrate on their area of specialisation.
His views were echoed by Juliana Ramli of HwangDBS Vickers Research who added "the deal could help reposition and turn around MAS as a premier long-haul carrier."
The deal could help reposition and turn around MAS as a premier long-haul carrier” Juliana Ramli HwangDBS Vickers Research
The two carriers have been competing against each other for past decade. However, their fortunes have taken completely different paths.
While Malaysian Airlines has gone through some tough times, AirAsia has grown robustly to become the biggest low-cost carrier in Asia.
Analysts say the rise of AirAsia has intensified the two carriers' competition and rivalry.
"Malaysian airlines decided that they want to take on AirAsia directly on routes where the later flies," said Siva Govindasamy of Flight Global.
"That effectively meant price competition, which is not good for business."
Mr Govindasamy said the deal will reduce direct competition, helping both airlines to concentrate on their area of specialisation.
His views were echoed by Juliana Ramli of HwangDBS Vickers Research who added "the deal could help reposition and turn around MAS as a premier long-haul carrier."
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