Is Tony signalling investors sell Airasia and buy MAS

If the story below is true, then it should be viewed for what it is , first and foremost a sale or a large chunk of AirAsia stock.

Regardless of the spin and bleating that are sure to follow the announcement about this being a national service, in the national interest, and no doubt a great sacrifice on the part of Choirboy Tony, and regardless of how the Malaysian public who are shareholders of the company react to that spin, fact remains that some 15% of AirAsia stock is held by foreign institutions who may not see things the Malaysian way( see list at http://www.airasia.com/my/en/corporate/irmajorshareholders.html)













AirAsia Parent Said to Near Malaysian Airline Share Swap; Stocks Suspended

http://www.bloomberg.com/news/2011-08-08/malaysian-air-airasia-parents-said-to-near-share-swap-deal-stock-halted.html

By Elffie Chew and Chong Pooi Koon - Aug 8, 2011 2:53 PM GMT+0800



AirAsia Bhd. (AIRA)’s biggest shareholder may agree to exchange a 10 percent stake in the low-cost carrier for stock of Malaysian Airline System Bhd. (MAS) as soon as tomorrow, according to a person involved in the discussions.

Malaysian Air’s government-controlled parent, Khazanah Nasional Bhd., will give Tune Air Sdn. stock worth as much as the AirAsia stake, said the person who declined to be identified as the discussions are private. Sepang, Malaysia-based AirAsia, the region’s biggest low-carrier, has a market value of $3.6 billion, about double Malaysian Air’s.

Cooperation between the two airlines, which both halted their shares from trading today, could pare competition as global economic concerns threaten to damp air travel. Malaysian Air could be able to focus on challenging Singapore Airlines Ltd. (SIA) for premium travelers on long-haul routes, while ceding shorter services to AirAsia, according to AmResearch Sdn., which upgraded Malaysian Air to “buy” today.

“They should focus on cooperation instead of fighting each other,” said Ang Kok Heng, who oversees $292 million as chief investment officer at Phillip Capital Management Sdn. An alliance could give the carriers improved bargaining power in negotiating new routes and plane orders, while Malaysian Air could also get help with fuel-hedging, he said.

Tony Fernandes, the chief executive officer of Sepang, Malaysia-based AirAsia and the biggest shareholder in Tune Air, declined to comment by text message. Khazanah spokesman Mohd Asuki Abas declined to comment when phoned by Bloomberg News.

AirAsia Growth

AirAsia has surpassed Malaysian Air in market value as Fernandes expands its low-cost operations across the region. In June, the carrier ordered 200 Airbus SAS A320neo airplanes. That raised its total orders for A320 aircraft to 375, including 89 that had already been delivered, the planemaker said at the time.

The airline and Malaysian Air both halted their shares pending announcements related to material transactions, according to separate Kuala Lumpur stock exchange statements today. CIMB Investment Bank Bhd. made announcements on behalf of both carriers.

AirAsia has surged 56 percent this year in Kuala Lumpur trading, making it the only one of the 18 stocks in the Bloomberg Asia Pacific Airlines Index to have risen in the period. It dropped 3.7 percent to 3.95 ringgit on Aug. 5.

Malaysian Air, based in Subang near Kuala Lumpur, jumped 8.1 percent last week, closing at 1.60 ringgit on Aug. 5. Khazanah, Malaysia’s state investment company, owns 69 percent of the carrier.

AirAsia flies to more than 20 countries, according to its website. It has ventures in Thailand andIndonesia, and it’s setting up operations in the Philippines, Vietnam and Japan. It offers long-haul flights through affiliate AirAsia X Sdn.

Malaysian Air flies to more than 100 destinations worldwide, according to its website. The airline in June announced an agreement to join the Oneworld alliance, led by British Airways andAmerican Airlines.

To contact the reporters on this story: Elffie Chew in Kuala Lumpur atechew16@bloomberg.net; Chong Pooi Koon in Kuala Lumpur at pchong17@bloomberg.net

To contact the editors responsible for this story: Barry Porter at bporter10@bloomberg.net; Neil Denslow at ndenslow@bloomberg.net

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