Malaysian Airlines: Share-swap issues.

Recently, it is official the share-swap between our two big airlines: MAS and AirAsia has been terminated due of some issues.  MAS and AirAsia had been in collaboration since 9 August last year.  The collaboration looks good especially for MAS where they had incurred lost about RM2.5bil for financial year ended Dec 31, 2011 until their decision to do share-swap.  The unions and employees do not want the share-swap due lack of engagement, fear of losing their job and the deal was also not in MAS’ favor thus brought their complaint to Government.

Before it is official to terminate the deal, there were lots of comments, issues and criticisms to these both airlines. The Group chief executive officer AirAsia Group, Tan Sri Tony Fernandes said “for the few negative detractors who made the most noise, I wonder what their solution is for MAS”.  AirAsia make the deal for share-swap in order to save MAS where he sees there are no alternative ways said Tony. For Tony, he did not see the negative impact about the deal and he thought that it will be very welcomed universally by the country. The point is to save MAS and Tony see the oppurnity to save it and then the ‘noise’ came up.

And now, it is officially the deal was off.  Tune Air gave back 20.5% share in MAS and Khazanah get back their 20.5% shares in MAS where originally owned by Tune Air thus increase their shares in MAS from 49% to 69.5%. However, the collaboration involve aircraft purchasing, engineering, ground support services, cargo services catering and training is still on.

As local airlines, both MAS and AirAsia should collaborate since there is least negative impact on it. Furthermore, MAS should think the best alternatives way to cover up their net loss immediately. They should ignore the selfishness and think about their 20,000 employees. Both MAS and AirAsia can gain profit if their proposal for collaboration is plan well. The price war will never end as the customers nowadays keep on increasing and wise in choosing the best price offered. As a customer, basically we only choose for the best price and services offered. For now, both of it are at AirAsia.

by:

Muhammad Akif b. Ahmat

Nur Hafizah