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New Straits Times
Saturday, Apr 12, 2014

Malaysia

MAS, AirAsia to appeal against $3.9m in fine

New Straits Times | Saturday, Apr 12, 2014

A Malaysian Airline System Bhd aircraft parks next to an AirAsia Bhd aircraft at Kuala Lumpur International Airport in Sepang.

KUALA LUMPUR - Both Malaysia Airline System Bhd and AirAsia Bhd will appeal to the Competition Appeal Tribunal against Malaysian Competition Competition (MyCC)'s decision of maintaining its fine of RM10 million each.

The two airlines yesterday informed Bursa Malaysia in a separate filing that their solicitors will be instructed to lodge the appeals after MyCC slapped them with the fine for infringing the Competition Act 2010 in September last year.

The airlines were found to be in breach of the market-sharing prohibition of the Act, as market-sharing is considered to be a serious infringement under the Act and can lead to distorting or restricting market competition.

MAS and AirAsia had entered into an equity-swap agreement in August 2011, which controversially saw key executives from the rivals sitting on one another's board of directors.

The equity-swap deal had triggered allegations that both companies were intending to create effective monopoly of domestic air routes.

"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 Tan Sri Siti Norma Yaakob, the chairman of the commission last September.

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