MAS-AirAsia deal to boost aviation sector and add synergies

KOTA KINABALU: The proposed share swap deal between Malaysia Airlines and AirAsia will strengthen the country’s aviation sector, said Transport Minister Datuk Seri Kong Cho Ha. Saying that it was a good development, Kong said the move would add synergies between the national carrier and one of the world’s fastest growing budget airlines. He said the share swap would result in a rationalisation of operations between the two airlines.

“The resulting synergies will especially be obvious in the routes both airlines are flying and it will also reduce their operating costs,” Kong said after visiting Kota Kinabalu International Airport (KKIA) where he was briefed about the ongoing runway and taxiway extension works. “For a long time, they have been operating on their own. At times, there has been a certain amount of competition between them.” Kong said with the deal, the issue of both airlines competing for new routes would not arise. It was reported that Khazanah Nasional Bhd, which owns over 69% of MAS, had concluded talks with AirAsia Bhd Group chief executive officer Tan Sri Tony Fernandes who is set to get a 20% stake in the national airline.

In another development, a contractor undertaking extension works at KKIA has been told to complete the project by March next year. The project, originally slated for completion in April 2009, is part of the RM1.4bil redevelopment of KKIA. Kong said work on the runway extension was nearly 90% completed after which the airport would be able to accommodate a fully loaded Boeing 747.

He said the completion was crucial for airlines to maximise the use of KKIA which had to be closed for several hours a day for the upgrading works. KKIA is the second busiest airport in the country.
-thestar online.