What are Malaysia Airlines’ options? Etihad tie-up?

Slow restructuring process starts at Malaysian carrier

Malaysia Airlines and the Malaysian government are considering various deep restructuring options, CAPA reports, and the possibility of a tie-up with Etihad Airways has emerged. Such a partnership would be logical for both airlines.

First would come a codeshare deal that builds on the limited codesharing the two carriers already have in place. But Etihad buying a stake in the troubled Malaysian airline is also a possibility.

Malaysia Airlines is approaching its oneworld partners with the idea. Approval by the alliance is not essential, but it gives oneworld members a chance to think of alternatives.

A month ago MAS reported a US$134 million loss for the first quarter of 2014. A new long-term restructuring plan could take up to a year before it is ready to be implemented.

The airline faces union resistance and political implications. Bankruptcy is not an option for the Malaysian government right now. A downsized airline with stronger partnerships could be the only option for a successful future.