Owners of Malaysia Airlines (MAS) and AirAisa have agreed to a share swap to allow the two carriers to work together on a broad range of areas.

Under the terms of the deal, Khazanah Nasional, which has a 69.5 per cent stake in MAS, will take up ten per cent of AirAsia while Tune Air Sdn, which owns some 23 per cent of the budget airline, will hold 20.5 per cent in MAS.

The arrangement is designed “to leverage on respective core competencies and optimise efficiency for the benefit of consumers”, explained a joint statement earlier.

Broadly, the agreement enables MAS, AirAsia and AirAsia X to focus on business segments in which they are capable of developing the most value.

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. 

The early phase for collaboration shall focus on immediate synergy opportunities which can be realised without significant effect on operations.

The Collaboration Agreement will come into effect immediately.

MAS chairman, Tan Sri Md Nor Yusof, said: “The signing of the agreement heralds an exciting new era of cooperation whereby the airlines involved will stand to gain significantly by tapping the benefits of working together.

“We believe that the joint collaboration will help MAS focus on our strengths in our core markets and work towards deriving higher loads and more efficient resource utilisation.”

The transaction has been pragmatically structured, added a statement from MAS, in that the business models, brands, boards, governance structures and cultures will remain distinct and separate, but is now complemented by the comprehensive collaboration frame (CCF) work.

AirAsia chief executive officer, Tan Sri Tony Fernandes, said: “By focusing on core competencies, it will enable both parties to increase product offerings to our respective customers.

“AirAsia and AirAsia X see growth opportunities in new routes and destinations. 

“Our business model requires us to continue to reduce prices in order to increase volumes for consumers in the low cost travel segment which we can now focus on in a more significant way.

“The two airlines are not combining, but competing in some cases and collaborating in some cases.”

Last year Malaysia Airlines was recognised as the World’s Leading Airline to Asia by the World Travel Awards.