AirAsia, Malaysia Airlines fined for price fixing

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mas-and-aaLow-cost airline AirAsia and Malaysia’s national carrier Malaysia Airlines have been found guilty of price fixing on certain routes from August 2001 to April 2012 and have each to pay $3 million in penalties, the Malaysia Competition Commission said in a statement on September 6.

The commission said the two airlines have been collaborating to integrate some routes in which they had earlier competed “at the expense of the consumers.”

AirAsia, the region’s largest budget airline, agreed in August 2011 to hand over a 10 per cent holding to a state investment fund in exchange for a 20.5 per cent stake in Malaysia Airlines. The deal was aimed in part at eliminating mutually harmful competition on some routes.

But it was unwound just 8 months later following pressure from Malaysia Airlines’ powerful employees union, which feared it could result in possible job losses and other cost-cutting at the national carrier.

Both airlines recorded profits in the second half of 2012. Malaysia Airlines, however, has been in the red this year while AirAsia has seen sharply lower profits.

Both parties have 30 days to respond to the decision.

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Reading Time: 1 minute

Low-cost airline AirAsia and Malaysia’s national carrier Malaysia Airlines have been found guilty of price fixing on certain routes from August 2001 to April 2012 and have each to pay $3 million in penalties, the Malaysia Competition Commission said in a statement on September 6.

Reading Time: 1 minute

mas-and-aaLow-cost airline AirAsia and Malaysia’s national carrier Malaysia Airlines have been found guilty of price fixing on certain routes from August 2001 to April 2012 and have each to pay $3 million in penalties, the Malaysia Competition Commission said in a statement on September 6.

The commission said the two airlines have been collaborating to integrate some routes in which they had earlier competed “at the expense of the consumers.”

AirAsia, the region’s largest budget airline, agreed in August 2011 to hand over a 10 per cent holding to a state investment fund in exchange for a 20.5 per cent stake in Malaysia Airlines. The deal was aimed in part at eliminating mutually harmful competition on some routes.

But it was unwound just 8 months later following pressure from Malaysia Airlines’ powerful employees union, which feared it could result in possible job losses and other cost-cutting at the national carrier.

Both airlines recorded profits in the second half of 2012. Malaysia Airlines, however, has been in the red this year while AirAsia has seen sharply lower profits.

Both parties have 30 days to respond to the decision.

Do you like this post?
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