Malaysia talks to rival airlines as it monitors AirAsia's financial health, sources say
KUALA LUMPUR/HONG KONG: Malaysia's government has asked Malaysia Airlines and Batik Air whether they could absorb AirAsia's domestic market share, said two people with knowledge of the matter, as part of what they described as scenario planning while authorities monitor the financial health of Southeast Asia's largest low-cost airline.
Malaysia has approached Malaysia Airlines and Batik Air to assess their potential to absorb AirAsia's domestic market share amid the Southeast Asian airline's financial struggles, according to sources. Government officials are said to be monitoring AirAsia closely due to soaring jet fuel costs and the airline's debts. Malaysia Airlines and Batik Air have expressed openness to expanding organically rather than acquiring the entire business, as absorbing routes and passenger volumes without aircraft would be more difficult.
AirAsia controls about 40% of Malaysia's aviation market and 60% of domestic flying, which has raised concerns over the government's financial stability. AirAsia's finance minister declined to comment on the allegations, stating that the company only discloses updates through official filings and corporate announcements.
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