Who’s Bidding for a Stake in Malaysia Airlines?

2014 was a rough year for Malaysia Airlines. In March, MH370 was lost over the Indian Ocean, and just a few months later in July, MH17 was shot down over Ukraine. Although the latter was not the fault of Malaysia, the airline is barely keeping its head above water as it continues to face financial burdens.

The climate has worsened in recent years, especially with the grounding of the 737 MAX, forcing the Malaysian government to consider selling, refinancing, or closing the airline. This has led to rumors of foreign airlines placing bids for stake in the carrier.

The Suitors

Last year, three suitors were rumored to have put in bids for strategic stakes in Malaysia Airlines: Qatar, China Southern, and Japan Airlines. More recently, some local airlines have also been rumored to place bids, including AirAsia and Malindo Air.

Although none of these airlines have commented on the rumors, Prime Minister Mahathir Mohamad of Malaysia confirmed five proposals had been received. Furthermore, The Star sources say Japan Airlines is indeed interested in gaining a 25% stake. One said, “The bids from the foreign carriers are more comprehensive and strategic as both plan to capitalize on the strategic location of Malaysia for their operations.”

Japan Airline’s offer for a stake in Malaysia makes sense. Both are in the Oneworld Alliance and have also recently signed a joint venture agreement to cover flights between Malaysia and Japan. Furthermore, Japan Airlines has said that the country could become its Southeast regional hub, offering low-cost flights and opening the door for further route expansion.

Rumors of an Air France-KLM Bid

Earlier Tuesday, Reuters reported that Air France-KLM offered to purchase a 49% stake in Malaysia Airlines, which would be enough to keep the crippling carrier running. However, Reuters has recently updated that news with a statement, “Air France-KLM had previously been in contact with Malaysia Airlines’ shareholders, but at this stage, Air France-KLM is not a current party to the sales process of Malaysia Airlines.”

The Franco-Dutch airline explained in a follow-up comment, “Air France-KLM continues to study global investment opportunities per its strategic goal to be an active yet pragmatic participant in industry consolidation, as presented at its Investors Day in November 2019.”