AirAsia, Malaysia Airlines merger an option as COVID-19 hits industry

A merger with AirAsia is seen as a possible solution to save the ailing Malaysia Airlines. Both are struggling as a result of the collapse in the global airlines industry. (Reuters)
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Updated 18 April 2020

AirAsia, Malaysia Airlines merger an option as COVID-19 hits industry

KUALA LUMPUR: Merging state carrier Malaysia Airlines Bhd (MAB) with budget airline AirAsia Group Bhd is one of the options to “save” them, Malaysia’s second-most senior minister told Reuters.

The coronavirus pandemic that has killed at least 143,744 people around the world has led to lockdowns, brought air travel to a virtual halt and left airlines battling for survival.

Mohamed Azmin Ali, Malaysia’s minister of international trade and industry, said talks would soon take place on various options to help the country’s airline industry.

He said a possible merger between MAB and AirAsia, a private airline based in Malaysia, was under consideration.

“That discussion took place even last year, even before this pandemic came. But we need to continue the discussion,” he said.

“We need to see how best we can save those airlines, and it’s not going to be a simple answer. Things are bad, the aircraft are not flying. We need to discuss how to address these issues.”

Neither airline responded to a request for comment.

BACKGROUND

The Malaysian government has been seeking a strategic partner for its national airline, which struggled to recover from two tragedies in 2014.

Azmin said that even before the pandemic, it was “no plain sailing” for the airline industry. Since last year, Malaysia has been looking for a strategic partner for MAB.

“We were also looking at some of the proposals coming from international players,” he said. “Now the situation is becoming more complex because of this pandemic. We are looking at all options.”

He did not say from whom the proposals had come for MAB.

MAB has struggled to recover from two tragedies in 2014 — the mysterious disappearance of flight MH370 and the shooting down of flight MH17 over eastern Ukraine.

Sources have said AirAsia and Japan Airlines had earlier shown interest in buying a stake. Privately held Malaysian group Golden Skies Ventures said this month it had made a $2.5 billion offer to fully take over MAB’s holding company.

AirAsia said last week it had no incoming revenue and 96 percent of its fleet was grounded, having suspended most of its flights since March.

On Friday, the airline said it planned to resume domestic flights starting with Malaysia on April 29, Thailand and the Philippines on May 1, India on May 4 and Indonesia on May 7. Some of those would be subject to governmental approval.


Japan’s capital sees prices fall most in over 8 years as COVID-19 pain persists

Updated 27 November 2020

Japan’s capital sees prices fall most in over 8 years as COVID-19 pain persists

  • Tokyo core CPI marks biggest annual drop since May 2012
  • Data suggests nationwide consumer prices to stay weak

TOKYO: Core consumer prices in Tokyo suffered their biggest annual drop in more than eight years, data showed on Friday, an indication the hit to consumption from the coronavirus crisis continued to heap deflationary pressure on the economy.
The data, which is considered a leading indicator of nationwide price trends, reinforces market expectations that inflation will remain distant from the Bank of Japan’s 2% target for the foreseeable future.
“Consumer prices will continue to hover on a weak note as any economic recovery will be moderate,” said Dai-ichi Life Research Institute, which expects nationwide core consumer prices to fall 0.5% in the fiscal year ending March 2021.
The core consumer price index (CPI) for Japan’s capital, which includes oil products but excludes fresh food prices, fell 0.7% in November from a year earlier, government data showed, matching a median market forecast.
It followed a 0.5% drop in October and marked the biggest annual drop since May 2012, underscoring the challenge policymakers face in battling headwinds to growth from COVID-19.
The slump in fuel costs and the impact of a government campaign offering discounts to domestic travel weighed on Tokyo consumer prices, the data showed.
Japan’s economy expanded in July-September from a record post-war slump in the second quarter, when lockdown measures to prevent the spread of the virus cooled consumption and paralyzed business activity.
Analysts, however, expect any recovery to be modest with a resurgence in global and domestic infections clouding the outlook, keeping pressure on policymakers to maintain or even ramp up stimulus.