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.
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?