MAS, AirAsia to fight competition infringement decision

by **Cals** Sat 07 Sep 2013, 08:29

MAS, AirAsia to fight competition infringement decision
Business & Markets 2013
Written by Cynthia Blemin of theedgemalaysia.com
Friday, 06 September 2013 19:18

KUALA LUMPUR (Sept 6): National carrier MALAYSIAN AIRLINE SYSTEM BHD [] (MAS) and low-cost budget airline AIRASIA BHD [], intend to argue against allegations they have infringed the Competition Act 2010, that carries a fine of RM10 million.

The Malaysia Competition Commission (MyCC) said today MAS and AirAsia have infringed Section 4(2)(b) of the Competition Act 2010, by entering into an agreement aimed at the sharing of markets in the air transport services within Malaysia provided by both airlines.

“MAS is reviewing the proposed decision in consultation with legal counsel,” said MAS in an announcement to Bursa Malaysia today.

MAS added it plans to submit its written representation and indicated it intends to make an oral representation to the Commission before Oct 18, 2013.

The MyCC decision is premised on an alleged breach by MAS, AirAsia and AirAsia X in entering into a collaboration agreement on August 9, 2011.

The particular routes under scrutiny were the Kuala Lumpur-Kuching, Kuala Lumpur-Kota Kinabalu, Kuala Lumpur-Sandakan and Kuala Lumpur-Sibu routes.

Meanwhile, AirAsia said in a statement it intends to “vigorously defend” the allegations that it has infringed section 4(2) (b) of the Competitions Act under the collaboration it entered with MAS in August 2011.

“We will review the matter with our counsel and reply to the Malaysia Competition Commission with our defence within the specified period of time,” AirAsia said.

Both airlines have 30 days from today to submit written representations or indicate whether they wish to make oral representations.

According to a press release issued by MyCC on its website, “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.

“When businesses agree to share markets, they are agreeing to stop competing at the expense of the consumers,” said MyCC chairman Tan Sri Siti Norma Yaakob.