KUALA LUMPUR: AirAsia Bhd is appealing against a ruling by the Malaysia Competition Commission (MyCC) that the budget carrier and Malaysia Airlines (MAS) were guilty of anti-competition practices, which saw each party fined RM10 million.

The hearing of the appeal took place at Kompleks Mahkamah Kuala Lumpur yesterday and will continue today.

The anti-competition watchdog had in April last year ruled that AirAsia (fundamental: 0.2; valuation: 0.6) and MAS were guilty of anti-competition practices. This follows its proposed decision issued on Sept 6, 2013, when MyCC announced that MAS and AirAsia would be fined up to RM10 million each for infringing section 4(2)(b) of the Competition Act 2010 by entering into a collaboration agreement which saw the two airlines sharing markets in the air transport services sector within Malaysia.

It said the penalty is less than the maximum fine of 10% of the companies’ respective worldwide turnover between January and April 2012, the time of the infringement.

MAS and AirAsia had entered into a share swap deal in August 2011 which had raised concerns that reduced competition would result in more expensive airfares for consumers. However, the deal was later reversed amid heavy political and union pressure.

AirAsia shares closed unchanged at RM2.21 yesterday, bringing a market capitalisation of RM6.23 billion.

This article first appeared in The Edge Financial Daily, on March 26, 2015.