Malaysian Airlines and AirAsia nearing deal to work together: Report

KUALA LUMPUR: Malaysia's two major airlines, Malaysian Airline System (MAS) and AirAsia are poised to form a working partnership, the Edge financial newspaper reported on Saturday quoting unnamed sources.

The newspaper said that state strategic investment fund Khazanah Nasional would enter as a common shareholder, buying up stakes in both MAS and AirAsia's major shareholder, Tune Air, to facilitate the deal.

"Working together will only be realistic if there is a share swap," a source was quoted by the paper as saying.

"Khazanah will have exposure in AirAsia's budget short-haul and long-haul business, while Tune Air will have exposure in the premium airline space via MAS."

The newspaper said the deal would be finalised "soon". None of the companies involved were immediately available for comment.

Copyright Reuters, 2011