AirAsia-MAS deal 'will kill competition'

The share swap between AirAsia and Malaysian Airlines Systems (MAS) will likely create opportunities for price fixing between the two airlines, said a DAP parliamentarian.

Speaking to reporters in the Parliament lobby today, Petaling Jaya Utara MP Tony Pua said the deal creates a collusive duopoly, where the two companies will naturally seek to protect each other instead of reacting to market forces.

"In the most, (MAS and Airasia), which are now intertwined like brothers, may be involved in price fixing, but in the least it is collusion to fix price. This goes against the spirit of the Competition Act 2010,” he said.

In contrast, Malaysians had benefitted from the keen contest between the two airlines over the past 10 years. This has also exponentially increased domestic tourism.

Since the deal is now fait accompli, the federal government should take steps to ensure that some level of competition is maintained for the airline industry, he said.

‘Make Firefly independent’

In the Dewan Rakyat yesterday, Pua had called on the federal government to compel MAS to sell its budget air service, Firefly Sdn Bhd, to the highest bidder.

“This will ensure that competition and real alternatives are available to ordinary Malaysians when seeking to travel domestically and regionally especially in the budget sector, which allows more people to fly,” he said.

Pua said his call is in line with Pakatan Rakyat’s Alternative Budget 2012 which has called for the break up of monopolies and blocking of cartels to ensure the lowest possible market prices for Malaysians.

The AirAsia-MAS deal has sparked outcry by MAS employer’s union, which has warned that AirAsia’s entry may dilute the union’s influence.

AirAsia chief executive Tony Fernandes has stated that cooperation with MAS is in the offing in areas of training, maintenance, repair and overhaul, cargo, logistics, sales, distribution and catering.