The troubled South East Asian carrier, Malaysia Airlines, might be getting a savior to help its dire financial situation. Japan Airlines is seemingly rising to the occasion and eyeing a stake in the airline. The Malaysian government is looking for options to off-load Malaysia Airlines,  as it is failing to post a profit since February 2016.  Back then, the Chief Executive Officer of the company, Christoph Mueller, said that the target is “to break even by 2018”, a target which has been missed by a mile. But is there hope for the airline to turn around its operations?

While Malaysia Airlines’ financial statements are rather uninformative and do not directly disclose the profit or loss numbers, the company has stated that it posted “lower losses than the year before” when it reported its FY2018 results, falling short of the turnaround plan. Launched by Khazanah Nasional Berhad, the sole stakeholder of the company, the 12-point plan had one goal in mind – Malaysia Airlines was to return to profitability in 2017, ensuring long-term financial stability at the carrier.

As the airline kept losing money, the Malaysian government, which owns Khazanah Nasional Berhad and subsequently, the airline, got fed up. In March 2019, Malaysia’s Prime Minister said that Malaysia Airlines “could be sold, shut or refinanced by the government”. Rumors were circulating of several potential buyers, including AirAsia and even Qatar Airways, after the latter Group’s CEO met with the Malaysian Prime Minister and several other Malaysian officials to “discuss key industry issues”, according to a press release issued by Qatar Airways.

Recent reports in the Malaysian news media indicate the ailing national carrier Malaysia Airlines may be 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.

And now, Japan Airlines is the latest name popping up in the potential buyers' list, according to reports. The two airlines have “signed memorandum of understanding to pursue a joint business agreement” on May 27, 2019 – the agreement is not exclusive to codesharing, as the press release has indicated that Japan Airlines and Malaysia Airlines are looking to “cooperate in a wider scope” and to exchange “best practices”, including developing tourism in Japan and Malaysia.

Throwing money at a problem

While a new stakeholder would improve the financial situation at the airline, the classic resolution of “throw money at it until it works” is not an optional solution to turn around the airline. Currently, Malaysia Airlines is the last dinosaur left in the region without a low-cost subsidiary. While flag carriers of neighboring countries, like Garuda Indonesia or Philippine Airlines, have established low-cost carriers to combat the likes of AirAsia long-ago, Malaysia Airlines is yet to do so. The Malaysia Airline System (MAS) has two subsidiaries, namely Firefly and MASwings, that are both operating as regional airlines with exclusive fleets of ATR-42 or ATR-72 turboprops.