Malaysia Airlines-AirAsia merger is an option says minister

27-Apr-2020 Intellasia | CH aviation | 6:02 AM Print This Post

Malaysia’s minister of International Trade and Industry has suggested that a merger of Malaysia Airlines and AirAsia is being considered as an option to help save both carriers.

“That discussion took place last year, even before this pandemic came. But we need to continue the discussion,” said Ali. “We need to see how best we can save those airlines, and it’s not going to be a very simple answer. Things are very bad, the aircraft are not flying. We need to sit down and discuss how to address these issues,” Mohamed Azmin Ali told The Straits Times.

Contacted for comment, a Malaysian Airlines spokesperson told ch-aviation: “Malaysia Airlines is of the opinion that solutions to address the industry over-supply situation and long-term sustainability need to be addressed holistically. Whilst mergers between airlines is one option, addressing the issues via regulations and policies should also not be ignored as it could just be as effective. Any merger proposal will need to take into account anti-competition regulations, and address the numerous implementation/integration challenges including the people aspects, and respective commitments/liabilities of both airline groups.”

AirAsia Group declined to comment.

The Malaysian government has been seeking a strategic partner for Malaysia Airlines since last year, with interested parties said to include AirAsia Group, as well as Malindo Air (OD, Kuala Lumpur International), Air France-KLM and JAL Japan Airlines. However, Ali, then the minister of Economic Affairs, confirmed in January that it was yet to receive one bid that was sufficiently attractive to take forward. Most recently Golden Skies Ventures, a privately-held Malaysian group, indicated that it had made a USD2.53 billion offer to take over Malaysia Aviation Group. Malaysia’s sovereign wealth fund Khazanah, which oversees the group, has expressed scepticism over the source of GSV’s funding, however.

For its part, AirAsia has its own financial woes, with founder and Chief Executive Officer Tony Fernandes posting an open message on the airline’s website earlier this month confirming that it has “no revenue coming in, 96 percent of our fleet is grounded and we still have significant ongoing financial commitments such as fuel suppliers and leasing agents.”

Both airlines are also still in the midst of Malaysia’s partial lockdown, which is due to end on April 28, with both carrier’s recently announcing different approaches to their future flying schedules. On April 17, AirAsia said that it planned to resume domestic flights starting with Malaysia on April 29, Thailand and the Philippines on May 1, India on May 4 and Indonesia on May 7, subject to governmental approval.

In contrast, Malaysia Airlines announced on April 20 that it will suspend operations across its network until May 2020 for domestic and June 2020 for international services.

https://www.ch-aviation.com/portal/news/89449-malaysia-airlines-airasia-merger-is-an-option-says-minister

 

Category: Malaysia

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