AirAsia, MAS face fines for collaboration

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Malaysia's competition regulator will impose fines of ringgit (M$) 10 million ($3 million) each on AirAsia and Malaysia Airlines for infringing competition laws under their aborted share swap.

The Malaysia Competition Commission says that the comprehensive collaboration framework agreement signed by the two airlines as part of a share swap deal agreed in August 2011 violated laws that ban market sharing on domestic services.

The deal was aborted in May 2012 following opposition from MAS' unions.

"Market sharing is considered a serious infringement under the Act as it is deemed to have the object of significantly preventing, restricting, or distorting competition in any market for goods and services," said Siti Norma Yaakob, chairman of the commission.

The commission adds that the penalties represent less than 10% of each airline's turnover between January and April 2012, and that they have been adjusted for voluntary actions taken by the carriers to remove certain routes from their revised agreement.

Malaysia Airlines says in a statement that it is reviewing the decision and intends to make "an oral representation to the Commission" in October.

At the time of writing, AirAsia had not responded to the proposed fine.