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Etihad: "not in talks with Malaysia Airlines" over equity investment

By Chris Chamberlin     Filed under: OneWorld, Etihad, Malaysia Airlines

UPDATE | Etihad Airways has denied any discussions with Malaysia Airlines that extend to a partial ownership or investment arrangement.

Etihad has released a single-line statement to the media, simply that it's "not in talks with Malaysia Airlines about the possibility of an equity investment in the carrier."

Not refuted are reports that the Gulf airline is looking to forge a comprehensive partnership with Malaysia Airlines, including extensive codesharing – although no official announcement has been made.

PREVIOUS, IN BRIEF | Malaysia Airlines has informed its Oneworld partners that it might form an alliance with Etihad Airways, says CAPA Centre for Aviation.

CAPA said Malaysia Airlines would begin with a comprehensive codeshare partnership with Etihad, building on the limited codesharing which is already in place.

However, given Malaysia Airlines' beleaguered financial position, there's a strong possibility that Etihad may opt out of an equity investment in the same way it's done with Virgin Australia, for example.

That’s particularly so “if the government is reluctant to relinquish control or allow the deep restructuring the carrier will need to be viable over the long term,” said the Sydney-based aviation consultancy.

Etihad is not a member of any alliance but holds a minority stake in a number of airlines around the world, and notably Airberlin retained its Oneworld membership despite Etihad's cash injection.

Read more: The Sydney Morning Herald

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About Chris Chamberlin

Chris lives by the motto that a journey of a thousand miles begins with a single step, a great latte, an opera ticket and a glass of wine!

 

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1 on 17/6/14 by eminere

Well, a "beleaguered financial position" didn't stop Etihad from investing in Alitalia, so who knows where it will end up with Malaysia Airlines.

1 on 18/6/14 by Oliver

I believe MAS has a lot of cultural issues which is why its hemeroaging money. 

1 on 19/6/14 by watson374

You mean the "cultural issues" surrounding things like paying a crony contractor RM50 for each nasi lemak catered? Oh ya...

2 on 18/6/14 by crosscourt

MH might end up being one of the shortest lived associations in OneWorld

1 on 18/6/14 by Peter

Well, MH has already outlasted the 10-months that Mexicana spent in the oneworld alliance between that date it joined and the date of its last flight.

Besides, Qantas has it's own partnership with Emirates, as do Air Berlin with Etihad. Even if MH does partner with Etihad, I don't think they'd simply pull out of oneworld considering the substantial investment they've already made.

1 on 18/6/14 by crosscourt

aware of that. i was saying it tongue-n-cheek

3 on 18/6/14 by TheRealBabushka

The Malaysian government will not sell Malaysia Airlines period.

There is too much at stake on the domestic politics front. Inaction, maintenance of the status quo and a "band aid" policy will be their approach.

1 on 19/6/14 by Azizi

Unlike Australia, Malaysia has too much pride in their national carrier so they wont let it die. They have bailed it out before and turned it around and they will do it again. The guy who turned it around last time was Idris Jala. Maybe they'll bring him on again.

Yes there are always politics at play (like Australia) but MH is a good airlines and a reputable brand name. Even with MH370, they are still quite popular. 

QF should definitely codeshare with MH and I don't know why they havent done it. SYD-KUL is a very profitable route and MH flies 3x daily I believe.

1 on 19/6/14 by watson374

SYD-KUL is saturated from the Malaysian end, and I don't think that it's a great prospect for Qantas Group.

There are already five flights each way each day. Three are flown by MAS and two are flown by AirAsia X. Premium and quality-sensitive economy passengers will most likely stay with MAS for schedule, (reasonable) quality and FF benefits (maybe), while the lower-yielding, price-sensitive leisure economy passengers will choose whoever is cheaper (i.e. AirAsia X).

This leaves very poor opportunity for both Qantas International and Jetstar International on the SYD-KUL route. A similar situation applies to the MEL-KUL route. I just don't see QFi or even JQi being able to break the hold both Malaysian carriers have.

1 on 19/6/14 by TheRealBabushka

The question is, is there adequate demand for premium tickets from passengers in non-GLC companies?

Premium traffic from GLCs would almost always fly MH.

1 on 22/6/14 by watson374

Basically no. I think QF would be limited to mostly the Australian-originating business traffic, and I don't believe there is enough of that. There is no doubt a lot of traffic, but it's not very high-yielding because it consists mainly of students and tourists flying on the cheap (and don't think about Jetstar, because it is unlikely that they can undercut AirAsia X and survive).

I do think that British Airways could run a KUL service with a 787-10, but not QFi. You simply cannot compete ex-SYD and ex-MEL (never mind the other ports) with a triple-daily full-service offering on MH, plus double-daily LCC on AirAsia X.

Also, I don't think Dato' Sri Idris Jala will be brought back - he has been appointed a Senator and is serving in the Cabinet as a Minister in the Prime Minister's Department. Also, he's a Sarawakian non-Muslim, so "cultural issues" surround the possibility of re-appointment.

To top it off, the only people who fly through KUL are those who want to do so based on airline or price, or who live in the Klang Valley. A lot of Malaysians in the extreme north (e.g. Penang) or extreme south (e.g. Johor) fly through SIN instead.

4 on 18/6/14 by nixjet

I like MH - I've flown many sectors with them over the last 12 months.  When combined with a QF domestic booking the itineraries into almost anywhere in Asia are great and incredibly well priced.  Why QF isn't actively negotiating with MH and it's other Asian oneworld partners to forge comprehensive codeshare agreements is beyond belief....

1 on 18/6/14 by crosscourt

yeah agreed, go figure.

 

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