Malaysia Airlines can’t make up its mind

Courtesy Reuters

While beleaguered Malaysia Airlines (MAS) gets deeper into the red and is looking for a strategic partner to prop it up, it seems not to be in any real hurry to accept any of the proposals it is said to have received. It has been reported that MAS needs up to RM21 billion (USD5.17 billion) to stay afloat until 2025.

A new slate of potential white knights made known recently, one different from the initial list, include AirAsia Group Berhad, Japan Airlines, Air France-KLM and Malindo Airways. No mention was made of four other local companies and Qatar Airways which subsequently clarified that it was not considering equity participation but interested in helping MAS get back on its feet. The proposals by the local companies apparently didn’t sell as they had limited or no aviation experience.

What has since changed? AirAsia which had previously insisted it was not interested has now emerged as a front-runner, which industry observers had at the onset said would be the best bet of success for the ailing MAS. AirAsia chief Tony Fernandes had proposed a merger to include budget long-haul AirAsia X. It is however understandable that the powers that be may not be too enthusiastic about being taken over by a rival compatriot which is a budget carrier and which has grown bigger than the national flag carrier.

Japan Airlines seems lukewarm about its interest which has been fanned by a commercial partnership with MAS to open access to each other’s destinations in their respective countries. The Japanese carrier continues to maintain its interest in expanding that partnership but steers clear of a firm potential investment in MAS. If at all it is interested, it is believed the stake would be small.

Air France-KLM on the other hand is said to have proposed a 49-percent take-up. However, that too has become an “iffy” judging by a statement released by the Euorpean conglomerate: “Air France-KLM had previously been in contact with Malaysia Airlines’ shareholders, but at this stage Air France-KLM is not a current party to the sales process of Malaysia Airlines.”

Malindo Airways is unlikely to be able to stand up against AirAsia in the run-in.

Why is MAS hesitant or is it pussy-footing, hoping for a better deal? Over time, the interest has shifted. It seems there is division within the company. The proposals by foreign companies are said to be better than those by local contenders, but there is reservation about selling out to an alien entity.

However, the saga holds a mystery card. Malaysian prime minister Dr Mahatir Mohamad said “there are about five proposals but of course some of them are just no go.” The fifth proposal is not known. Is it a “no go” or could this be the surprise choice, and who could it be?

Previous speculation had thrown up names like British Airways which seems more interested in expanding its stronghold in Europe while preferring a wider commercial arrangement elsewhere.

More recently there was suggestion that Singapore Airlines might be interested to work with MAS to support each other in the region and world-wide. But the deep rivalry between the close neighbours which goes back a long way to when they split and became competitors is not something that is easily forgotten.

Apparently, Dr Mahatir was said to be unhappy with how the ongoing evaluation was proceeding, so it may not be long when MAS finally accepts the hand of one of the suitors, whether already named or yet to be known.

About Dingzi
Writer by passion, with professional expertise in aviation, customer service and creative writing. Aviation veteran with more than 30 years' experience, columnist, pubished author of fiction, poetry, plays and travel stories, editor and management consultant. Nature lover who abhors cruelty of any form to animals, and a tireless traveler.

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