Owing to consistently poor business performance, Malaysia Airlines is currently up for sale with Air France proposing to purchase a massive 49% stake in the airlines while Japan Airlines interested in investing in a 25% stake in the underperforming airlines.
The proposals, however, are not confined to the two airlines. Malindo Air that is the Malaysian unit of the Lion Air of Indonesia as well as the AirAsia Group have also submitted their bid for a stake in the dying Malaysian Airlines.
Malaysia Airlines Was Hit By Two Tragedies In 2014
As per the sources, while the bids from the foreign investors are more lucrative, Malaysia Airlines, however, is more interested in giving an edge to the domestic carrier, AirAsia. Malaysia Airlines has been committed to recovery following the two incidents in 2014 that saw the Malaysia MH17 flight being shot down in eastern Ukraine and another one, MH370, mysteriously disappearing during the same year. In order to support its recovery, Malaysia Airlines has been in search of a strategic partner in the past five years.
Malaysia Airlines is currently owned by Khazanah Nasional Bhd (sovereign wealth fund). Following the tragedies of 2014, Khazanah invested an additional $345 million to buy back 30% of its shares. The move was directed at taking the airlines private in 2014.
Representatives from AirAsia, Malindo, and Air France have not yet commented on the news. Japan Airlines, on the other hand, expressed its excitement for partnering with Malaysia Airlines. The specifics of the investment required, however, were not divulged.
Malaysian Government Wants To Finalize The Deal In The Current Quarter
Mahathir Mohamad, the current Prime Minister of Malaysia, highlighted on Monday that the national airline has so far received five proposals that are under evaluation. While officials have refrained from putting a deadline on a prospective deal with one or more of the bidders, sources have informed that it is in the best interest of the government to finalize the deal with an investor by the end of the current quarter.
As of 2019, Malaysia Airlines has already partnered with Japanese Airlines. The partnership currently only covers flights between the two countries. If the partnership is expanded in the upcoming months, as per Japanese Airlines, it can be expected to cover the United States flights as well.
As per the analysts, it is also noteworthy that while Japanese and Malaysia airlines are a part of the same alliance (Oneworld airline), other bidders like Air France is currently a constituent of SkyTeam alliance.