May 02, 2012 (LBO) Budget carrier AirAsia, its long-haul arm AirAsiaX and Malaysian Airline System (MAS) have aborted a stock swap but will form joint ventures in procurement and aircraft maintenance to cut costs and meet competition.
AirAsia said key shareholder Tune Air and Khazanah Nasional will unwind a share swap deal signed in August 2011. AirAsia and MAS will also drop a plan to issue warrants to each others' shareholders.
But the two airlines will form a joint ventures to outsource procurement including fuel, insurance, IT, communications and for aircraft maintenance and repair services.
The move will cut costs and make the airlines better operated in liberalized environment of ASEAN Open Skys in 2015, the budget carrier said.
"We are very conscious of the increasingly more competitive environment, given ASEAN Open Skies, and have been heartened by the meeting of minds between the three airlines in progressing the collaboration efforts…,” chief exective Tony Fernandez said in a statement.
AirAsia is Asia's largest low cost carrier.