Qatar Airways has been named one of three airlines on a shortlist to invest in troubled Malaysia Airlines. Meanwhile, Qatar Airways has sent mixed signals, making clear it will not acquire the airline, but leaving open the possibility of a limited investment or expanded partnership. But I’m not convinced.
Over the weekend, The Edge Malaysia, a weekly business publication, reported that Khazanah Nasional Bhd, Malaysia’s sovereign wealth fund and owner of Malaysia Airlines (MAS), had narrowed down the list of acquisition “finalists” to four, including three airlines:
- China Southern Airlines
- Japan Airlines
- Qatar Airways
But when asked about the investment by Simple Flying, Qatar Airways quickly dismissed it:
This news is incorrect, Qatar Airways has no intention to bid for Malaysia Airlines.
This echos what Qatar Airways has said for months. But what about a small investment rather than full control?
Qatar Airways’ Airline Investment Strategy
As a reminder, Qatar Airways has invested in the following carriers:
- Air Italy – 49%
- Cathay Pacific – 9.6%
- China Southern Airlines – 5%
- International Airlines Group (Aer Lingus, British Airways, Iberia, Vueling) – 21.46%
- Latam – 10%
“We will always go after goldsmiths, not scrap dealers.”
– Qatar Airways CEO Akbar Al Baker
With the exception of Air Italy, Qatar has invested in profitable, well-established airlines. Unlike its Gulf neighbor Etihad, which invested in troubled airlines with the hopes of turning them around, Qatar Airways has exercised far more caution in its airline investment portfolio.
Qatar Airways CEO Akbar Al Baker recently met with Mahathir bin Mohamad, the Prime Minister of Malaysia. Asked about a potential investment, Al Baker made clear Qatar Airways would not acquire MAS:
We do not have any interest to acquire Malaysia Airlines because we are strong enough to expand in the Southeast Asian region.
Hence, we do not need another airline.
…
We will see if there is anything we could do to help Malaysia Airlines turn around. However, we cannot divulge the details in public as the conversation was with Prime Minister Tun Dr. Mahathir Mohamad.
A bit cryptic, but typical Al Baker style.
#QatarAirways Group Chief Executive H.E. Mr. Akbar Al Baker today met with the Prime Minister of #Malaysia, The Honourable Tun Dr. Mahathir bin Mohamad to discuss issues of mutual interest. pic.twitter.com/7Eu2MyRZhH
— Qatar Airways (@qatarairways) August 26, 2019
The case of Air Italy leaves open the hope that QatarAirways might be open to “helping” MAS by investing it, or at least expanding a codeshare partnership.
With MAS’s suspension of most European routes and its sole North American route, Qatar Airways could be a feeder from Kuala Lumpur to regions across Europe and North America.
But I question that. First, Qatar Airways can expand in the region without Malaysia Airlines. Second, Qatar Airways can expand within Malaysia without help from MAS.
I’m just opining here, but I think the promise of “help” was politeness more than genuine concern.
CONCLUSION
Malaysia is encountering many of the same issues Thai Airways is. With Singapore so close and fierce competition in every direction, difficult questions about the future of MAS are necessary…and taking place.
Unlike Air Italy, where Qatar Airways really saw a gap in the market and a chance to challenge Alitalia, I just don’t see Qatar Airways investing in MAS in a market already over-saturated with competition and ripe for direct expansion rather than in collaboration with a bloated and inefficient airline.
Do you think Qatar Airways will invest in Malaysia Airlines?
Nope. It’s probably gonna be China. Another one in their back pocket.
You are correct to draw parallels with Thai: both are foundering for similar reasons, including gross ineptitude, hopeless management, historical cronyism/corruption and a disturbing ( and risible) tendency to believe in their own significance.
I made a DISASTROUS error in flying with Malaysia last week; it could not have been worse: unexplained delays, blatant lies by ground staff, pathetic transfer arrangements at KUL, missed connections . Abysmal, woeful, awful airline. The pits. I’d sooner fly Scoot or Ryanair than ever again set foot on this God-forsaken, miserable excuse of an airline. I HOPE they go broke as I wouldn’t like to see another airline waste money on these assholes. Good riddance…
Don’t say anything about scoot until you have flown them, especially long haul. None of the airlines in that region interest me besides SQ upfront, however drawing parallel of scoot and MH is gravely in correct, scoot left me by my own at the airport after my flight was delayed by 2 days, no compensation nothing. But I sort of deserved it giving a budget carrier a chance.
Ha! Yes, of course you’re correct. But Malaysia sent my BP soaring…really, so, so bad…
I doubt Qatar will invest in Malaysia Airlines.
That said, Malaysia has a reasonably strong offering which in some ways is equal to Singapore Airlines in business class and economy. The trouble is they match Singapore pricing and expect to take the business from a bigger competitor who has a bigger footprint and long established marketing. Malaysia also have a level of political interference that Singapore do not and so suffer from many of the same problems as Thai. They also have to a point an ‘entitled’ legacy workforce which again Singapore do not where the churn particularly among the ‘Singapore girls’ is high at something like not more than two three year contracts and then out.
I’m not optimistic that much will change for Malaysia but if they didn’t have political interference to contend with they would be in a much stronger position.
I’ve flown with them a few times and while not stellar, I haven’t had a bad experience and generally found crews and others I’ve encountered to be helpful and pleasant.
I believe qatar airways turn to MRO business to expand profit..previous Malaysia airlines MRO is 3rd best asian pacific MRO. And one more reason qatar airways want to reduce maintenance cost effectively.
Qatar can’t expand to Malaysia without government approval, why would they approve more Qatar flights to Malaysia if they will compete with MH?
Malaysia is the budget airline hub for AirAsia, and this works as an advantage, potentially feeding AirAsia traffic into the European and ME regions that Qatar serves, even eastern North America. That will take away traffic from SQ long-hauls to these regions.
First of all, MH can never ever compete with QR. MH business class offerings for ex., though they are actually improving, are wayyy beyond any standards (at the level) of QR.
On a recent trip back from Narita, a fellow business class pax (a Japanese) asked the FA if pyjamas is available. She said no. For appx the same flight duration, QR has. And don’t let me start with the IFE and foods on board.
MH is actually feeding QR, not Air Asia, with the codeshare and all. Seriously, if anyone flies with AA will it be convenient and okay to go through the hassles of collecting the luggages and having to check in again. AA doesn’t offer interlining.
To me, if the Govt wants to sell MAB, have the guts to do so. They are dilly dallying, and that makes things even worse with the company. And too bad, it is very demoralising..