Kuala Lumpur - AFP
Fast-growing budget airline AirAsia will acquire 20.5 percent of ailing flag carrier Malaysia Airlines in a share swap that will see the fierce rivals join forces, the carriers said Tuesday. The deal also gives Malaysia-based AirAsia CEO Tony Fernandes -- who took over the no-frills carrier and turned into one of the industry\'s biggest success stories -- a voice in turning around loss-making Malaysia Airlines. Under the deal, Malaysia\'s state investment arm Khazanah Nasional, which held nearly 70 percent of the national carrier before the deal, will get a reciprocal 10 percent stake in Tune Air, AirAsia\'s parent company, the two sides said. \"As a result, Tune will hold 20.5 percent of shares in MAS and Khazanah will hold 10 percent of shares in AirAsia,\" a joint statement by the parties said. The arrangement, first reported by Malaysian media at the weekend but only confirmed Tuesday, marks a coup for the brash Fernandes. A separate statement by Malaysia Airlines said a four-person committee including Fernandes would take over management of the national carrier. As part of that arrangement, Malaysia Airlines managing director Azmil Zahruddin Raja Abdul Aziz will resign to make way for the new leadership, the statement said. Before the announcement analysts had said the tie-up would be also be welcome news for struggling Malaysia Airlines. Fernandes has been rapidly expanding AirAsia\'s route system and undercutting Malaysia Airlines with its bargain air fares on routes in which they compete. Sources close to the deal have said it would allow the carriers to work together to cut rising costs by sharing maintenance and affect bulk purchases of parts and aircraft.