THE government is considering a possible merger between Malaysia Airlines and AirAsia as a way out to save the carriers from the economic fallout from the Covid-19 pandemic, said Minister of International Trade and Industry Mohamed Azmin Ali.

He was reported by Reuters as saying this merger is one of the options under consideration.

Azmin also said deliberations would take place on the various options available, adding that a merger between ailing Malaysia Airlines and low-cost carrier AirAsia had been on the cards since last year.

“That discussion took place even last year, even before this pandemic came, but we need to continue the discussion,” he said in the interview with Reuters.

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

Airlines industries worldwide have been grounded following the closure of international borders and airspace to curb the spread of the coronavirus.

Last month, Bloomberg reported that Putrajaya may consider bailing out Malaysia Airlines and AirAsia, which have been hit hard by the Covid-19 outbreak.

The report said a special purpose vehicle may be set up to take over the debt of companies or a merger is possible, citing unnamed sources with knowledge of the matter.

Deliberations are at an early stage and the government hasn’t decided on a course of action, added that report.

Last week, it was reported that private firm Golden Skies Ventures (GSV) has placed a US$2.5 billion (RM10.9 billion) bid to take over Malaysia Airlines.

According to GSV’s proposal, the government will get to keep its so called golden share that allows it majority voting rights and maintain Malaysia Airlines as national flag carrier.

The firm will also assume most of the Malaysia Airlines Berhad’s debt held by the government in outstanding Islamic bonds.

The government has been seeking a strategic partner for the airline, which has struggled to recover from the mysterious disappearance of flight MH370 and the shooting down of flight MH17 over eastern Ukraine, both in 2014. – April 17, 2020.