Aviation experts suggest merger between Malaysia Airlines, AirAsia unlikely

Aviation consultancy Endau Analytics has announced that mergers are an unlikely option for supporting a rescue plan for Malaysian airlines during the Covid-19 crisis, the company said.

Aviation experts said a merger between Malaysia Airlines Bad and Air Asia Group would create a monopoly. At present, AirAsia controls 50 percent of the market while MAB, which is wholly owned by sovereign wealth fund Khazanah Nasional Bhd, has about 30 percent.

The merged entity would have roughly 80 percent of the market share, giving it market dominance.

Bernama has reported The International Trade and Industry minister said deliberations would soon take place on various options to help out the country´s airline industry.

The minister said a move to cut down on redundancy might force at least 40 percent of the existing workforce to be out of jobs, adding to the unemployment number which is already estimated at 2.6 million post-Covid-19.

The International Air Transport Association (IATA) estimated the impact of the Covid-19 outbreak on the aviation industry would be severe with second-quarter revenues possibly falling by up to 68 percent.

It said a devastating net loss of USD 39 billion would be recorded in the quarter and many airlines could possibly go bankrupt in the near term without government aid.