Proposed merger of two airlines: Can everyone fly now?

May 5, 2020

Malay Mail

MAY 5 — The rumoured merger between our national flag carrier, Malaysia Airlines Berhad (MAS), and our largest low-cost airline carrier, AirAsia Group (AirAsia), has been the talk of the town for a few weeks amid the Covid-19 pandemic.

With many airlines across the globe slumping into voluntary administration, including Virgin Australia Group (Virgin), Australia’s first big corporate casualty of the pandemic, the aviation industry faces a threat of significant decline of market competition.

For instance, the falling of Virgin may prompt Qantas Airways Limited (Qantas) to arise as the only significant airline player in Australia, leading to plummeting competitive levels in Australia. The aviation market there had been previously duopolised by both Virgin and Qantas.

According to Australian authorities, swift action in enforcing competition laws will be taken by its antitrust watchdog3 against anti-competitive behaviour such as attempts to swamp airline routes, artificially push down prices or lock in exclusive deals with airports and suppliers in a bid to ensure that airlines are able to compete effectively as the industry rebuilds.

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