AirAsia intends to utilise Malaysia Airlines’ (MAS) maintenance, repair and overhaul (MRO) services in a bid to make Malaysia the region’s premier aircraft servicing hub.

AirAsia chief executive Tan Sri Tony Fernandes said the no-frills airline, Asia’s largest budget carrier, could now tap into MAS’s formidable MRO facilities following the share swap, which saw AirAsia take a stake in the ailing state carrier.

“MAS has fantastic facilities which AirAsia has not used, primarily because why would we give profit to someone who’s trying to kill us?” he told reporters after speaking at the Khazanah Megatrends Forum 2011 here today.

“So now we can collaborate and I think again, if you put the volume of MAS and AirAsia together, it becomes a mega-MRO that, in partnership with someone else, could become a real competitor to Singapore’s MRO.”

Fernandes said AirAsia was also looking at other areas of co-operation with the state carrier such as in cargo, catering and flight training to help cut costs and maximise revenue for both airlines.

He promised more details on cost and revenue joint ventures with MAS would be announced in the near future, subject to anti-competition laws.

In an attempt to bolster MAS’s fortunes, state asset manager Khazanah Nasional Berhad swapped 20.5 per cent of the flag carrier’s stock for a 10 per cent stake in AirAsia on August 9.

The swap enabled AirAsia bosses Fernandes and his partner Datuk Seri Kamaruddin Meranun to sit on the MAS board and to ostensibly help turn it around.

Khazanah has denied that AirAsia was bailing out MAS.

Shareholders of AirAsia will get one free MAS warrant for every 10 shares in the low-cost carrier while MAS shareholders will get one free AirAsia warrant for every 30 MAS shares.

MAS announced in August a net loss of RM527 million for the second quarter of 2011 due to higher fuel costs despite recording a better yield and a nine per cent growth in passenger revenue from the same period last year.

This brings total losses in the first half of the year to RM769 million even as the airline said the profit outlook for the second half of the year appears bleak.

Its main regional competitor Singapore Airlines, while was also hit by higher fuel costs, fared better with a S$44.7 million (RM108 million) net profit for the same period.

The rapid recovery of the aviation industry has not only resulted in increased air traffic, but also encouraged governments and private equity organisations to invest in aircraft maintenance, repair and overhauling (MRO). The sheer potential of the domestic passenger market is the engine that is driving the Asian aviation industry. India, China and Australia are witnessing growth in the domestic markets. Also, the booming air traffic growth facilitates the setting up of new low-cost MRO hubs in Singapore, Malaysia, India and China, thereby fuelling the competitive climate. Asia Pacific is expected to account for significant incremental growth in the aviation sector in the coming decades.

ASEAN is expected to spend upwards of USD330 billion on new commercial aircraft alone in the next 2 decades whilst naval spending in the region should reach USD 174 billion during the same period, according to reliable industry reports.