“The government does not want to be bailing out Malaysia Airlines so many times. But, at the same time, the government wants to have a say. So, we may not have a majority share, but we have to preserve some government role,” the Prime Minister told reporters as quoted by The Edge Markets. The option for the state to reduce its shareholding to a “minority” stake has also been reiterated by the Deputy Minister.

Keeping up with Malaysia Airlines

On July 9, 2019, Mahathir confirmed the government had received and was studying four proposals, many from Malaysian companies, not named by the Premier, which had offered to either buy a stake in the flag carrier or manage it, Bloomberg reported at the time. Among the potential investors – a consortium led by a former Chairman of AirAsia Group, Datuk Pahamin Rajab.  

The ex-AirAsia Group Chairman’s meeting with the Prime Minister early in July, widely reported by local news media, sparked speculation the budget carrier could be taking over Malaysia Airlines. AirAsia founder Tony Fernandes later refuted the claims, saying his airline had no involvement with the national carrier.

Recent reports in the Malaysian news media indicate the ailing national carrier Malaysia Airlines may bet put up for sale or possibly taken over by its low-cost competitor, AirAsia, unless the country’s government comes up with a feasible turnaround plan for the airline.

Other speculation surrounding potential suitors pointed to Singapore Airlines, after Malaysia Airlines inked a Memorandum of Understanding (MoU) with the carrier late in June 2019, on a strategic tie-up aimed at, among other enhancements, building on the two airlines’ existing codeshare agreement for flights between Malaysia and Singapore. The flag carrier of Singapore, however, has so far shown no interest in making an investment.

On the lookout for new partners

Meanwhile, as the prospect of a sale remains hazy, Malaysia Airlines continues to look for ways to bring in revenue and remain competitive in delivering a full-service product, including by venturing into new partnerships. 

Recently, on July 24, 2019, the flag carrier announced it is launching a new travel marketplace called MHholidays in partnership with tourism giant TUI Group. The platform allows customers to book accommodation, as well as holiday packages combining a flight and a stay. In the future, Malaysia Airlines expects the platform to expand beyond flights and hotels to include ground transfers and tours.

And on July 27, news emerged of another partnership – a three-month agreement with Turkey’s Dorak Holdings to provide charter services between Kuala Lumpur, the capital of Malaysia, and Istanbul, capital of Turkey, from October until December 2019. According to the agreement, Malaysia Airlines will operate three times weekly flights utilizing its Airbus A330 aircraft.

The national carrier has had a turbulent recent history involving years of mismanagement and billions in losses, despite the government’s many efforts to revive the flag carrier. The company also took a major hit from two tragedies – the crash of MH17 on July 17, 2014, over eastern Ukraine, and the mystery of MH370, the flight that disappeared on March 8, 2014, en route from Kuala Lumpur to Beijing.

After Malaysia Airlines was nationalized in 2014, Khazanah, the sole shareholder of the flag carrier, initiated a restructuring process, pouring $1.5 billion (6 billion ringgit) into the company. The recovery plan also saw the laying off of 6,000 staff. Since then, the airline has been scaling-down its network and now employs a workforce of only 7,159.