Khazanah Nasional Bhd, Malaysia's sovereign wealth fund, which is the sole shareholder of Malaysia Airlines (MAS), has hired investment bank Morgan Stanley to look at strategic options for the flag carrier. The company was brought in as an independent adviser for the airline's recovery plan.
A Bloomberg report quoted Md Farid Md Rafik, a deputy minister in Mahathir Mohamad's department as saying that the Malaysian government is willing to become a minority shareholder in the carrier,
implying a stake sale is among options under consideration.
Suitors for Malaysia Airlines must have expertise in the industry with strong financial standing, Md Farid said. The government will not compromise on the carrier's branding and won't allow any layoffs among its 14,000 local employees, he said.
Four proposals under consideration
While Malaysia's prime minister Mahathir Mohamad has said the carrier still faces the possibility of being shut down as the government seeks to save money, he has also emphasised that he wants the airline to recover and keep "Malaysia" in its name. The government is studying four proposals it received for the airline, most of them from local investors, the prime minister said earlier last month.
MAS - along with its smaller subsidiaries MASWings and Firefly - carried 16.1 million passengers in 2018. The company currently has 113 planes in service, made up mostly of single-aisle Boeing 737s and turboprop jets to serve domestic and regional routes.
Fernandes turns down role as white knight
In a related development, Tony Fernandes, group chief executive officer of Air Asia, Southeast Asia’s largest budget carrier, has ruled out any involvement with MAS, saying the profitable budget airline he co-founded is focused on growing organically and speeding up its push to become a digital enterprise.
The South China Morning Post quoted Fernandes as saying: “I am not sure how many languages I have to say it in. I am on this big journey of transforming AirAsia. AirAsia is focused on AirAsia.” He welcomed, however, MAS’ recent move to expand its cooperation with Singapore Airlines (SIA), saying the expanded partnership would in turn improve AirAsia.
“As long as the competition is fair competition then I have got to be better,” Fernandes explained. “Competition is what makes us better. I don’t want anyone or anything to be blocked from doing a decent business, saving jobs or creating jobs.”
The AirAsia Group includes airlines in Thailand, India, Japan, Indonesia, the Philippines as well as its low-cost long-haul unit AirAsia X. The airline flies exclusively Airbus planes and was flying 226 planes at the end of 2018, mainly across the Asia-Pacific. In the 2018 financial year, it posted a net profit of US$409 million.
Nol van Fenema