Air France-KLM is being tipped as a possible suitor for 49% of Malaysia Airlines.
Japan Airlines is also being linked with acquiring 25% of the Kuala Lumpur-based carrier.
Low-cost rival AirAsia and Malindo Air, the Malaysian arm of Indonesia’s Lion Air, have also submitted proposals, sources told Reuters.
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“The bids from the foreign carriers are more comprehensive and strategic as both plan to capitalise on the strategic location of Malaysia for their operations,” one of the sources reportedly said.
The Malaysian government has been seeking a strategic partner for its national airline, which has struggled to recover from two tragedies – the mysterious disappearance of flight MH370 and the shooting down of flight MH17 over eastern Ukraine.
The carrier was taken private in 2014 by sovereign wealth fund Khazanah Nasional, which paid 1.4 billion ringgit ($345 million) for the 30% of shares it did not already own.
Malaysia’s prime minister Mahathir Mohamad said on Monday five proposals had been received as part of a review that started last year but declined to name the suitors.
Malaysia Airlines last year signed a joint venture agreement with JAL covering flights between Malaysia and Japan.
Malaysia Airlines and JAL are both members of the oneworld airline alliance, while Air France-KLM is part of the rival SkyTeam group.
Khazanah, which appointed Morgan Stanley last year to advise on potential options for the airline, said it was working closely with the government.
“While there have been several proposals in this regard, a review of the options available to us is still ongoing,” Khazanah said.
The sources said Air France-KLM had proposed setting up a hub for maintenance, repair and overhaul services in Malaysia, while JAL had offered to make the country a regional hub, including for low-cost flights.
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