AirAsia and Malaysian Airline System (MAS) have scrapped their proposed share swap deal amid pressure from the workers' union at MAS.
The deal was expected to reduce competition and help MAS, the national carrier, return to profitability.
However, it had proven unpopular with the union amid concerns that the tie-up may lead to restructuring and job cuts.
Tony Fernandes, chief executive of AirAsia, and his deputy Kamarudin Meranun have both quit the MAS board.
The pact had seen Tune Air, the parent company of AirAsia, exchange 10% of AirAsia shares for 20.5% of MAS stocks with state-owned Khazanah Nasional.
Azman Mokhtar, managing director of Khazanah said: "The cross-holding of shares has become a distraction to management's efforts to turnaround MAS and win stakeholders' support for collaboration."
Source & Image : BBC
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