How far will the Singapore Airlines-Malaysia Airlines MoU go?

How far will Singapore Airlines and Malaysia Airlines go in the deal signed on June 30? This is what many are asking after reports the Malaysian carrier is to get a new owner soon.

The Memorandum of Understanding signed between Malaysia Airlines and Singapore Airlines has also started speculation that SIA would be a white knight strategic investor in the Malaysian carrier.

But it is too early to say how deep the partnership between the two airlines will go, says CAPA Centre for Aviation chief analyst Brendan Sobie in a report published by Reuters.

He says the MoU signed last week between the two airlines has naturally started the speculation however there are many challenges, both political and commercial, that would need to be overcome to make that a serious option.

SIA and Malaysia Airlines Berhad have signed a preliminary agreement to explore a wide-ranging strategic partnership memorandum on June 30 to enhance the partnership between the two airline groups.

The MOU will see the two airline groups building on their existing code-share agreement which covers flights between Singapore and Malaysia but opening up opportunities for other potential cooperation which could also include cargo and maintenance, repair and overhaul services.

The deal between Malaysia Airlines and SIA will be finalised in the coming months and it includes SIA subsidiaries Scoot and SilkAir, and MAB subsidiary Firefly. SIA is a Star Alliance member, and MAB is in oneworld.

A group of businessmen are in talks with the government on plans to turnaround the money losing national carrier.

The government, Prime Minister Dr Mahathir Mohamad says, is willing to sell the airline but to people who are capable of turning it around.

Yesterday, Pahamin Ab Rajab and his five partners who are keen to take over Malaysia Airlines Bhd have given their assurance that there will be no job cuts should their plan to turn the ailing airline around be accepted by the government.

The Star says the offer through their vehicle, Najah Air Sdn Bhd, has proof of funding.

But they will need to conduct a three-month due diligence before unveiling their full turnaround plan for the airline.

Pahamin says the company is looking at a 49% stake in the airline and the carrier’s sole share holder Khazanah Nasional Bhd will hold 51%.

This will assure the public the airline will remain a national carrier.