Malaysia Airlines stuck with conflict of interest in east and disinterest in west

January 24, 2020: The declared rumour of Air France-KLM’s plan to acquire stake in Malaysia Airlines may after all have some portent of truth, as the Franco-Dutch airline group confirmed in a statement that it had been keeping in touch with the Malaysia Airline’s stakeholders.

Ever since the disappearance of the aircraft MH370 over the Indian Ocean and the MH17’s crashing over Ukraine, Malaysian Airlines has been in talks for financial troubles with plans of selling, refinancing or closing down the airline. While many international carriers – Qatar, Malindo Air, China Southern, and Japan Airlines – have bid for the stake, Reuters reported that the sovereign fund that owns Malaysia Airlines favours a deal with AirAsia.

The National Union of Flight Attendant Malaysia (Nufam) has asked the authorities for an investigation and probe against the proposed takeover of Malaysia Airlines by AirAsia Group, which is one the major rivals of the airlines. Nufam also declared the deal to be alarming. AirAsia Group’s deal summarises radical transformations including estimated synergy of $280 million per year; solving industry overcapacity. The Malaysian prime minister, Mahathir Mohamad, has stated his preference to be in favour of foreign companies that would further develop their activities in Asia.

Japan Airlines (JAL) is also nudging the Malaysia Airline for 25 percent stake, which could be a natural extension to its already existing code sharing deal with the airline that covers flights between Malaysia and Japan. With a successful acquisition, and a base in Malaysia, JAL professes to extend its operation by covering U.S. flights.

For now, it is unclear how many bids have been assessed and rejected by the Malaysian government. And the mounting bidders and caution surrounding AirAsia’s bid, with the concern of conflict of interest, may obstruct and delay the verdict.