KUALA LUMPUR: Khazanah Nasional Bhd’s inaugural approach in deciding Malaysia Airlines Bhd fate by hiring global investment bank Morgan Stanley may lead to the national carrier’s merger with a top airline in the world, said analysts.
Khazanah had never paid for a foreign investment bank’s services to help with Malaysia Airlines’ turnaround.
Analysts believe Malaysia Airlines now has a stronger chance to be matched with a “capable” foreign airline in a potential deal brokered by Morgan Stanley.
They felt that a merger with an established global airline would allow Malaysia Airlines to scale faster and more efficiently.
Political and economic analyst Prof Dr Hoo Ke Ping believes Morgan Stanley has the expertise and right connection to match Malaysia Airlines with a more capable partner.
“It is time to do a proper job. Malaysi Airlines has never had a proper consultation. It never consulted an investment bank before.
“I agree with the move to hire Morgan Stanley. They have a bunch of experts who can find out Malaysia Airlines’ weaknesses and figure out the best strategic options for Malaysia Airlines,” he told the New Straits Times.
“Plus, the investment bank can open doors for the right partnership for Malaysia Airlines. It can link Malaysia Airlines to top airlines in the world,” he added.
Putra Business School associate professor and manager of business development Dr Ahmed Razman Abdul Latiff said hiring of Morgan Stanley meant a firm decision on Malaysia Airlines' future was imminent as there was no point of wasting time and money on Morgan Stanley.
He said Morgan Stanley could help match Malaysia Airlines with the right partner for merger and acquisition.
“It is possible if we can leverage on Morgan Stanley connection with industry leaders especially those in aviation industry.”
Bloomberg Intelligence senior analyst for aerospace, defence and airlines George T. Ferguson said a tie-up with another similarly situated airline in the region could help build scale.
Accenture Malaysia country managing director Azwan Baharuddin said foreign investors were likely suitable to help the national carrier return to its heydays with the focus on expanding or enhancing network (destinations).
Bloomberg reported on Tuesday, citing Prime Minister’s Department Deputy Minister Md Farid Md Rafik, that Khazanah had hired Morgan Stanley to look at strategic options for Malaysia Airlines.
Farid, according to Bloomberg, said the government was willing to become a minority shareholder in the carrier. This implied a stake sale was among options under consideration.
“Suitors for Malaysia Airlines must have expertise in the industry with strong financial standing,” he said, adding that the government would not compromise on the carrier’s branding and won’t allow layoff of its 14,000 local employees.