AirAsia, Malaysia Airlines form partnership

KUALA LUMPUR, Malaysia ( — Budget carrier AirAsia and state-owned Malaysia Airlines have formed an alliance under a share swap deal to end their long rivalry and boost business.

Tune Air, the parent of AirAsia, and government investment arm Khazanah signed an agreement Tuesday to exchange shares. This will see Tune hold a 20.5 percent stake in Malaysia Airlines, while Khazanah gets a 10 percent stake in AirAsia.

Analysts say the deal will curtail competition and help turn around the struggling state carrier and improve AirAsia’s access to lucrative international routes.

However, some opposition lawmakers fear it will create a monopoly.