The shares of Malaysia Airline System (MAS) and AirAsia have been suspended from trading on the country's stock exchange on 2 May, pending a likely announcement on the calling off of the carriers' share-swap agreement inked last August.
Both carriers requested the suspension as they "intend to make a material announcement", according to statements on the Bursa Malaysia website.
The MAS employee union has been protesting against the deal for fear that the restructuring of the carrier, and the introduction of AirAsia's founder Tony Fernandes into its board, could bring with it a massive cost-cutting campaign that could result in job cuts.
Local media also reported that the country's opposition has said that the government should admit that the share-swap was a mistake.
In August 2011, a deal was announced where AirAsia's parent, Tune Air, would take a 20.5% stake and two board seats in MAS. In exchange, state investment arm Khazanah Nasional, which holds a majority of shares in MAS, would take a 10% stake in AirAsia.
As recently as March MAS chairman Md Nor Yusof issued a statement defending the share-swap, saying that "it is not part of the acute financial problems at MAS" but rather "part of the solution".
He added that the board was confident that the share-swap would benefit both carriers, and that the pair was already setting up joint venture firms for procurement and training. He also mentioned a potential maintenance deal between AirAsia and the MAS engineering arm.
MAS recorded a net loss of ringgit (M$) 2.5 billion ($816 million) last year, compared with a net profit of M$237 million in 2010.
Source: Air Transport Intelligence news
