Malaysian Airline System Berhad (MAS), AirAsia Berhad and AirAsia X Sdn Bhd recently entered into a Comprehensive Collaboration Framework (CCF) which includes a Collaboration Agreement to explore opportunities to co-operate on a broad range of areas, as per a press release. According to the agreement, all parties will strive to complement each other’s businesses so as to leverage on their respective core competencies and optimise efficiency for the benefit of consumers.
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. An AirAsia shareholder will be granted approximately one MAS warrant for every 10 AirAsia shares held. In addition, Tune Air Sdn Bhd (Tune Air) and Khazanah Nasional Berhad (Khazanah), the major shareholders of AirAsia and MAS respectively, have agreed to acquire existing shares of both companies from each other. As a result, Tune will hold 20.5 per cent of shares in MAS and Khazanah will hold 10 per cent of shares in AirAsia. Khazanah will continue to be the single largest and major shareholder of MAS, the national flag carrier. In addition, Khazanah proposed to acquire 10 per cent of shares in AirAsia X on terms and price to be mutually agreed on later.
Broadly, the Collaboration Agreement enables MAS, AirAsia and AirAsia X to respectively focus on business segments in which they are capable of developing the most value. Under the Collaboration Agreement, the parties shall assess and review their network services to enhance their offering of services and customer experience. This will include partial interlining and flights to new destinations currently not served by any of the airlines.