Malaysia won't rule out MAS-AirAsia merger

Malaysia won't rule out MAS-AirAsia merger

Senior minister says every option must be explored to save ailing state carrier

Malaysia Airlines planes are parked at Kuala Lumpur International Airport in Sepang. (Reuters file photo)
Malaysia Airlines planes are parked at Kuala Lumpur International Airport in Sepang. (Reuters file photo)

KUALA LUMPUR: Merging the money-losing state carrier Malaysia Airlines (MAS) with the budget airline AirAsia is one of the options to “save” them as the Covid-19 crisis batters the industry, says Malaysia’s second-most senior minister.

The pandemic that has killed nearly 145,000 people around the world has led to lockdowns in many countries, brought air travel to a virtual halt and left airlines battling for survival.

Mohamed Azmin Ali, Malaysia’s minister of international trade and industry and the government’s designated second-in-command, said deliberations would soon take place on various options to help out the country’s airline industry.

A possible merger between MAS and AirAsia was considered earlier, he told Reuters on Friday.

“That discussion took place even last year, even before this pandemic came. But we need to continue the discussion,” he said.

“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.”

Neither airline provided any immediate response to a request from Reuters for comment.

Azmin said that even before the pandemic crisis, it was “no plain sailing” for the airline industry. Since last year, Malaysia has been looking for a strategic partner for MAS.

“We were also looking at some of the proposals coming from international players,” he said. “Now the situation is becoming more complex because of this pandemic. We are looking at all options.”

He did not say from whom the proposals had come for MAS.

The Malaysian government has been seeking a strategic partner for its national carrier, which struggled to recover from two tragedies in 2014 - the mysterious disappearance of flight MH370 and the shooting down of flight MH17 over eastern Ukraine.

Sources have said AirAsia and Japan Airlines had earlier shown interest in buying a stake in MAS. The privately held Malaysian group Golden Skies Ventures said this month it had made a US$2.5-billion offer to fully take over the holding company of MAS.

AirAsia said last week it had no incoming revenue and 96% of its fleet was grounded, having suspended most of its flights since March and its long-haul arm, AirAsia X, had also parked most of its aircraft at its Kuala Lumpur hub.

On Friday, the airline said 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. Some of those would be subject to governmental approval.

Malaysia is in the middle of a month-long partial lockdown scheduled to end on April 28. It has so far reported Covid-19 infections in 5,251 people, 86 of whom have died.

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