AirAsia wants to ditch pact with MAS

File photo of top executives of the various companies involved at the signing ceremony of the Comprehensive Collaborative Framework in Kuala Lumpur on August 9, 2011.

KUALA LUMPUR, July 24 — Budget carrier AirAsia wants to dissolve all joint-venture agreements with flag carrier Malaysia Airlines (MAS), just months after unravelling a share swap deal that went sour, the Business Times reported today.

The business daily quoted a source as saying that Asia’s largest low-cost carrier decided at a board meeting last week to terminate its agreements with the national airline.

But AirAsia group chief executive officer (CEO) Tan Sri Tony Fernandes declined comment when queried through text messages, while calls and text messages to AirAsia Malaysia CEO Aireen Omar went unanswered, the paper said.

It also said that MAS chief executive officer Ahmad Jauhari Yahya did not respond to a text message to him.

Terminating the memorandum of understandings (MoUs) between AirAsia and MAS would effectively wipe out the remnants of a deal dubbed the Comprehensive Collaborative Framework (CCF) between Khazanah Nasional Bhd and Tune Air Sdn Bhd signed on August 9, 2011.

In that cashless deal, state asset manager Khazanah and Fernandes’ Tune Air agreed to swap shares in MAS and AirAsia respectively, to facilitate a collaboration between the two carriers ahead of the ASEAN open skies policy.

But agitation by MAS employees and several politicians forced Putrajaya to cancel the deal last May 2.

However, both airlines agreed on a supplemental agreement to salvage the initial collaboration plans, with two MoUs to focus on the setting up of a joint-venture company to provide aircraft component maintenance support and repair services while another was to set up a special purpose vehicle by MAS, AirAsia and AirAsia X to improve value for money and to increase competitiveness through procurement synergies.

Business Times quoted an analyst as saying news of a possible cancellation of the joint ventures between MAS and AirAsia was not surprising.

He said MAS employees were reluctant to co-operate 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 MAS allow for a termination by mutual agreement anytime within a six-month period from the date of the signing although it will not release a lock-up period of six months that disallows both parties from talking to, negotiating or co-operating with any other parties, said the paper.