1.

 BACKGROUND
Malaysia Airlines' origins began with a joint initiative between the Ocean Steamship
Company of Liverpool, the Straits Steamship Company of Singapore and Imperial
Airways to the incorporation of Malayan Airways Limited (MAL) on 12 October 1937.
 
In 1966, the Governments of Malaysia and Singapore jointly assume the control of MAL.
In 1971, Malaysia Airlines System Berhad (MAS) was incorporated with an authorized
capital of RM100 million. In 1976 MAS enter the information age when it computerized its
whole operation.
 
In the 1980s, MAS became the first major government agency to be privatized and in 1985,
MAS entered the corporate sector by offering 70 million shares for sale. This exercise raised
Malaysian Airline System's paid-up capital to RM350 million and brought reserves up to
RM227 million.
 
Today, apart from being a carrier, Malaysia Airlines has diversified its operations into human
resource development, training, catering, property consultancy and technical ground support
for aircrafts.
 
However, the expansion program in mid 1990s has given adverse effect to the company.
Unfavorable market condition (Asia Economic Crisis) has also worsens the situation.
Burdened with debts obligation and inefficient management, MAS needs for urgent
transformation.
 
Presently, government has taken control of the carrier and implemented various measures to
turn over the business.
 
 
 
 
2. ANALYSIS
 
2.1. INTERNAL ENVIRONMENT - SWOT Analysis
 
Strengths
     
a. Government Support
MAS as a national flag carrier have a very important role to Malaysian reputation. The
unsuccessfulness of MAS is also meant the unsuccessful of Malaysia. Thus, MAS could
depend on the government to protect it from financial distress or any other difficulties.
 
b. Strong Recognitions
For the past few years, MAS has won numerous recognitions in term of its service in the
world.
In the year 2002 for instance, it has coveted the Best Cabin Crew Award from international
research house. These recognitions would be of much help in promoting its business. Having
received various recognitions and awards, helps in building customers and staffs’ confidence
toward MAS.
 
c. Modern Facilities
MAS is also known as to be the safest airline in the industry. It also has the latest, modern
aircraft in its fleet, and excellent facilities and infrastructure at its new base in Kuala Lumpur
International Airport (KLIA). Those assets are essential in assisting MAS to provide
satisfactory services to its customers.
 
d. Experiences
MAS has been in industry for more than 4 decades. They have vast experience as compared
to new industry players.
 
Weaknesses
 
a. Poor Management
For 5 consecutive years since 1997, MAS has suffered losses due to inefficient and
incompetence of management. Poor revenue management and expansion decision lead to the
negative return of the business. This gives bad impression to our national carrier.
 
b. Government Interference
The government has interfered much in the MAS management. This also contribute to the
incompetence on part of the management to freely manage the business.
 
c. Debts Problem
Economic recession that started in 1997 had given dramatic impact to MAS, when as at that
time MAS was in the process of expanding its operation. The company has ordered 25 new
aircrafts from Boeing and set up several overseas freight centers. Sudden market downturn,
which in effect leads to unfavorable exchange rate immediately, increase MAS debts burden.
This had given tremendous effect to the ability for MAS to run the business.
 
Opportunities
 
a. Tourism Industry
The Government through its Tourism Ministry has been focusing on the development of
tourism industry in Malaysia. It is said that this industry has contributed a big amount to
Malaysian fund and the government has always given full support in this industry. The low
exchange rate of Malaysian Ringgit has given more reason for tourists, especially from rich
countries, to come to Malaysia especially for shopping and traveling. Thus, the government
has been actively promoting Malaysia as a tourists’ destination. One of the steps taken is to
make KLIA a regional air hub. Another is the launching of ERL system to connect Kuala
Lumpur city with the airport (KLIA) in Sepang. Clearly, this would indirectly benefit MAS.
 
b. New Markets Segment
MAS has identified some new markets to be captured. It has found that many people used
MAS service to travel to Indonesia, China, Thailand and India.
 
Threats
 
a. 9-11 Event
On 11 September 01, another dramatic episode happened in US where it effected to most of
airlines companies in the world. The event has caused fear to passengers in air travel.
This resulted to major losses for many airline companies where the numbers of passenger
using the service has dropped drastically. Consequently, some of the companies choose to
merge in order to absorb losses and becoming more competitive. With the merging of these
companies they had increased their routes and market which directly give impact to MAS
passenger load.
 
 
 
2.2. INDUSTRY ENVIRONMENT – 5 Forces Model
 
Threat of New Entrant
 
a. International Entrants
The threat comes from the competition with other international airlines such as Singapore
Airlines and Thai Airlines. This exists because of an outdated regulatory system that
guaranteed each sovereign country airlines to the world. As the government is really
ambitious to set up and to increase usage for KLIA as the hub in this region, they have signed
many MOUs with other players to grant landing on KLIA. This immediately gives threat to
our national airlines.
 
b. Local Entrants
Air Asia, the Malaysia’s first no-frill budget airlines, Transmile Air (for Haj) and Pelangi Air
are among competitors which are playing in local industry. Air Asia for example with their
hard work efforts and promotions have attracted many local passengers to use their service in
local destination.
 
Power of Customers
 
These concern with price, quality of services, convenience, schedule and comfort. With
plenty alternatives abound, customers are free to choose the airlines that suit to their needs.
At international front, companies such as SIA and UAE they are competing to gain market
segment in this region by providing quality services to their passengers. In the domestic
market, airlines such as AirAsia has given inexpensive rate for its tickets.
 
Power of Supplier
 
Boeing is the main supplier for MAS aircrafts and parts. It has dominated the supply of
aircrafts in the world, though Airbus tries times and again to repartition the market pie. MAS
has been using Boeing aircrafts and services for quiet a long time. Thus, MAS maintenance
people have been very familiar with Boeing crafts. Due to this, it is difficult for MAS to
switch to another supplier. With no choice on part of MAS, Boeing could demand for a high
price.
 
Substitutes
 
For long-distance travel, where time is of essence, air travel has no ‘real’ alternative to it.
Although, sea and land journey can be of substitutes, they can not match the convenience,
time-efficient, and comfort of travel by air. Therefore, we found MAS would not have to
worry on the existence of substitutes to air travel, specifically to long-distance, far-reached
travel.
However, as to short distance journey, customers would prefer to use the modern land
alternatives. For instance, trip within Peninsular Malaysia would be of much cheaper through
land than that by air. This, land-travel, may pose as a viable option to what is offered by
MAS.
 
Competitive Rivalry
 
In the regional market, big and strong competitor such as Singapore Airlines (SIA) gives
great impact on MAS. At global market, the event of Sept 11, which resulted to cost
escalation and margin erosion, has made US and European airlines to merged, leading to
existence of large dominant airlines groups.
 
 
2.3. GLOBAL/EXTERNAL ENVIRONMENT – S T E P Analysis
 
Sociocultural
 
Malaysia is composed of three major races where Islam is the official religion. Its richness in
cultural diversity and could be used as the attracting factor for the tourists to travel to
Malaysia, and indirectly helped MAS to improve its operation to include more foreign
destinations.
 
Economic
 
The Asian economic crisis in the late 90s that has affected the South East Asian region was
also a contributing factor that caused MAS to suffer 5 consecutive losses (refer to Appendix
1.1). This situation got worsens as the Malaysian Ringgit currency was devalued, which in
turn led to high interest on foreign trade. Investments made by MAS to expand its business
by purchasing more aircraft were highly affected by this. The devaluation of RM had also led
to low spending power, which caused lesser people to travel by air.
 
The tragedy of September 11 has also contributed to the reported losses by MAS. Since then,
the world economy was on its downturn and the world masses were getting ‘phobia’ to travel
by air. MAS have to bear the losses as its main operation is based on the international
network.
 
Politics and Legal
 
Due to the very bad economic recession, Malaysian Government through Bank Negara had to
revise the foreign and monetary policies. As such, Ringgit Malaysia (RM) was pegged to RM
3.80 to 1 US dollar. The Government had to impose stricter and tighter policies for Malaysian
to travel abroad to avoid currency outflow, which indirectly caused low rates of travelers for
MAS. The situation worsens, when the regional economic recession was coupled with the
instability in the political arena in Malaysia in 1998. As a result, the investors lost their
confidence, being more cautious and prefer the attitude of ‘look and see’ and some of them
have ceased their operations in Malaysia, resulting in more layoffs.
 
Technology
 
MAS has also invested in IT and telecommunications advancement to increase the efficiency
of its operation. More people can have access to the MAS services just through the Internet
where people can book and buy their ticket online. Besides that, more promotions and
advertisements can be done through the Internet, which can attract more and more people to
travel with MAS.
 
The growing demand in cargo services has resulted in more airlines opting to convert their
passenger aircraft into cargo aircraft. This new trend provides an alternative for MAS to
reduce some money on purchasing new cargo aircraft and perhaps enter into other possible
profitable operations.
 
Institutional
 
MAS is fully supported by the government even though it reported losses for the last 5
consecutive years. The Ministry of Transportation and Ministry of Tourism could help MAS
whether in terms of improving the public services and developing new infrastructure as well
as promoting the national air carrier. The financial institutions have also show their support
by providing MAS with loans, lenient debt settlement and restructuring.
 
Physical
 
New infrastructure like the Kuala Lumpur International Airport (KLIA), the speed train
Expressway Rail Link (ERL), Light Railway Transit (LRT) and public transport were
designed to give maximum access for user to the MAS services. Besides that, the cargo
facilities infrastructure such as the international port has also helped MAS in providing an
added value to its cargo service.
 
3. KEY ISSUES & PROBLEMS
 
Basically, MAS’s problems can be categorized into 3 key issue namely financial problems,
operational problems and management problems.
 
 
3.1. FINANCIAL ISSUES / PROBLEMS
 
In 1995, MAS’s management had launched a strategic initiative to aggressively scale up its
operations and international network. As such, MAS has placed an order of 25 new Boeings
aircraft which are to be delivered in 5 years time.  The purchases of the aircraft were made in
US Dollar and no hedging method was used at that time because of the stable currency
between Ringgit Malaysia against U.S Dollar. Unfortunately in 1997, Asian countries
including Malaysia incurred economic down turned which, has resulted the devaluation of
Ringgit Malaysia and an increased of interest rate. Consequently, MAS’ cost of purchase
increased tremendously.   
 
Due to the above scenario, MAS was reported to incur 5 consecutive losses for the past 5
years. In 2001, MAS’ after tax loss was reported to be RM1.3 billion. Prior to the
restructuring exercise in 2002, MAS had incurred a net loss of RM900 million and its total
debt was amounting up to RM9.2 billion.
 
 
3.2. OPERATIONAL ISSUES / PROBLEMS
 
Prior to economy downturn, MAS’ management was aggressively expanding MAS’
operations. The management was emphasizing on quick visibility, to be present around the
world. Many new destinations (which most of them were not viable) have been introduced.
(such as Denmark, Finland, and South Africa).  In addition to that, MAS’ product marketing
and yield management division focused merely on selling their products to fill the quotas and
not to improve the profit yield.
 
 
3.3. MANAGEMENT ISSUES / PROBLEMS
 
MAS were facing the problems of management competency. Most of its subsidiaries, like
MAS Catering and MAS Cargo were in bad financial shapes (i.e. operating at loss). Besides,
some of the subsidiaries were transferring money for the directors’ personal use. The
previous management has also failed to lead MAS efficiently and makes a viable decision on
its expansion program.
 
 
4. SOLUTIONS
 
To address the above mentioned issues, government and the MAS new management team
have taken several steps. Followings are those actions that have been taken or planned:
 
 
4.1. FINANCIAL SOLUTIONS
 
Due to MAS bad financial standing, the government has to step in to save the entity from
further deterioration. It has outlined and implemented a restructuring plan which details are as
follows:-
 
        RM6.9billion liabilities would be transferred to Penerbangan Malaysia Berhad
(PMB)  (government-owned)
 
        73 aircraft worth RM5.1 billion would also be transferred to PMB
 
        482.5 million new shares at RM3.85 per share would be issued for assumption of net
liabilities of RM1.85 billion
 
        70% of MAS Catering would be sold for RM175mil to Gubahan Saujana Sdn. Bhd.
 
        RM1.48 billion worth of various MAS properties would be sold to Ministry of Finance
Inc
 
        After the restructuring process, the new MAS will operates international passenger &
cargo (domestic& international) services.
 
        But, MAS would still operates domestic routes on behalf of government for fees
 
        MAS would remain listed on the Exchange market.
 
 
4.2. OPERATIONAL SOLUTIONS
 
MAS is trying to revive its operations by introducing rationalization program where MAS
will terminate its existing 12 unprofitable destinations. By doing this, MAS is saving
approximately RM190 million per year. Further, MAS will also re-deploy its aircraft to more
profitable routes such as Indonesia, Thailand, Philippines, Europe and to explore Japan
market. (more focus Asia destinations).
 
New destinations to be developed which to penetrate markets that will provide high yield.
MAS will increase flight frequencies to those destinations. MAS will also going to improve
its Revenue Management System, so as to generate high returns and cut down the operating
costs.
 
In addition, MAS is also planned for aggressive global advert campaign and trying to seek a
strategic alliance with other reputable airlines.
 
 
4.3. MANAGEMENT SOLUTIONS
 

In order to revive MAS back into its healthy condition, the previous management was

replaced. A new professional management team spearheaded by Datuk Md Nor Yusof, a

Chartered Accountant were hired to manage MAS. Key figures like Datuk Azman Yahya and

senior executives of Qantas Airlines were promoted into the new team. A few reputable
consultant firms were also appointed to advise and consult MAS on how to transform the

losing company into efficient and profitable one (such as BinaFikir Sdn Bhd).
 
 
5. RECOMMENDATIONS
 
Having gone quite thoroughly with the analysis, we would like to make several
recommendations to the MAS new management team. These recommendations and proposed
solutions shall enable the management to have some ideas from the viewpoint of a third,
independent party. Our recommendations and proposed solutions are as follows:
 
 
5.1. NEW BUSINESS MODEL
 
MAS is entering into a very high-risk kind of business where they are subject to external
factors such as economic downturn and global political scenario. In this event, MAS should
be more cautious in undertaking their long-term investment.
 
Amongst the recommendations that we would like to propose with regard the new business
model are as follows:
 
        To pursue more opportunities in some other destinations perhaps by spreading their
wings to the third world country.
 
        To further review its route rationalisation by focusing on more profitable routes. In this
instance, such routes may not be high volume but yet profitable. This is based on the
principle of differentiation and niche market.
 
        MASKargo, its cargo arm should concentrate on the cargo shipping and transhipment
activities on the region closer to Malaysia such as North Asia, East Asia and the other
part of its.

        To initiate a regional training base for say, southeast Asian region.
 

 
5.2. PLANNING PROCESS
 
One of the reasons for the failure of MAS was due to its drastic expansion plan undertaken by
the previous management. In order for MAS to avoid doing more mistakes in the future,
MAS should be more careful in assessing their resources and deploying the resources for
more appropriate purposes. For example, although it is a right decision for MAS in the
redeployment of their aircrafts to more profitable routes, such as Indonesia, Thailand and
Philippines, we strongly recommend that MAS should continue to pursue opportunities in
other key markets such as India, China, Japan and perhaps the Middle East. Besides that,
MAS should also take the opportunity to enter into that market of international destinations,
which are withdrawn from by other big players.
 
 
5.3. STRATEGIC MANAGEMENT
 
We would also like to make recommendations in regards to the strategic management. We
are of the view that the management should try to focus on the following issues:
 
        MAS should focus on their customers, where Customer Oriented Service Philosophy can
be applied. Service orientation must be well managed and clearly defined.
 
        MAS’ Mission and Vision must be clearly understood by and communicated to all staffs
so that they would together strive to achieve desired goals. To achieve this, perhaps we
would recommend that MAS should have a new corporate culture, of being more prudent
and careful, service oriented and helpful, instilled among the staffs especially the top
management. Apart from these, all staffs should be motivated through proper rewards and
incentive programs. This would create the sense of belonging among the workers
towards  the company.
 
        Management team should also show their managerial competencies and train all the staff
to improve their performances. This can be done by allowing the staffs to participate in
decision making process, wherever appropriate. We would also recommend that MAS
should introduce the decentralized management structure as this model has been widely
accepted in United States and Europe.
 
 
5.4. OTHER RECOMMENDATIONS
 
a.       Foreign Equity Participation
 
We strongly recommend that the Government of Malaysia to allow Foreign Equity ownership
in the company. This strategic alliance works very well such as that happened when Port of
Tanjung Pelepas in Johor has managed to secure the participation of one of the giant shipping
company, MAERSK as their strategic partner. With this alliance, Port of Tanjung Pelepas has
managed to secure more business opportunities earlier on enjoyed by Singapore Port
Authority when MAERSK was using their port facilities.
 
MAS has taken the first step by signing an alliance agreement with KLM Dutch Airlines
sometimes in June 2001.
b.      Implement Efficient Financial System
 
To introduce an efficient accounting and financial system for monitoring funds flow and for
preparing a proper budgetary system.
 
c. New Fare Structure
 
To introduce a reasonable charge structure that would enable MAS to achieve full cost
recovery. Please take note that normally users are prepared to accept higher level of charges
provided that corresponding improvements in qualities are offered. The quality improvements
should cover time and cost benefits namely direct routings and elimination of holdings during
arrival and en-route phases.
 
For instance, MAS’ local competitor Air Asia has introduced the no-frills flights for domestic
destinations. This has been accepted well by the local consumers. Not to be left behind, MAS
has follow suit by introducing an offer discounts of 50% on its airfares for up to 14,000 seats
a week for domestic destinations. Although this is quiet an improvement, MAS should
continuously improve the fare rate.
 
c.       Tapping Profitable Markets
 
MAS may also focus on some specific regions after considering the number of competitors,
opportunities and spending power in those regions. For long haul destination MAS may have
MOUs with other players so they can share the cake of profit rather than gain nothing.
Besides focusing on passenger services MAS can focus on freight service where there are
high demand from the markets.
 
Proposed decision making approach and solution:
After reviewing several problems from various angles it is clearly seen that MAS managements are
delaying to delivers their decision which have taken or somehow management taking wrong
approaches to take appropriate decision for the organization. However, in decision making process
there have two ways to make decision which is may the management of MAS can take Logical
approach or Magical Approach. However, for a big organization like Malaysian airlines should be
implement logical approaches rather than magical approaches. The problems which arise in MAS
management organizations need to be analyze their internal as well as external factors very
carefully. Through logical approach identify the problems in systemic ways and take necessary action
step-by-step. Once accomplish one problem than would be taking another step for next. Moreover,
management must be acknowledging that, each stage fully covered through intelligence and care.
ASK SIR L model, which is one of the most effective component in logical approach decision making
model.

Through this model organization will be identify the most important problems which is exist in. For
example, from the scenario of MAS customer service problem which state, customers trying to
change their flight through online service and getting trouble to fixed it. After that, they called to
administrator and did not get any feedback, later on send an email but no response at all. However,
again they called to the service department and explain overall scenario to the management over
the phone and get replied back “I am not the one responsible for this and I not in charge to resolve
this issue and there is no one else to talk to this issue”. However, this issue gave a negative
indication of MAS customer service.

What decision can take MAS organization through ASK SIR L model? Firstly, they need to find out
what are the causes existing thus the problem arise. Once specify next step will be find out a
possible solution to overcome from this. However, before implement the possible solution which
decision taken by the groups than forward it to the top management to review the decision. Once,
top management appreciates overall decision then will start to work for implementation.
How Malaysia Airlines Can Be Saved From Financial And Reputational
Ruin
With this month's downing of MH17 and the March disappearance of MH370, it seems that if
Malaysia Airlines didn't have bad luck, it wouldn't have any luck at all.

It is incredibly rare for two catastrophic events to happen to the same airline in such a short period
of time, Chris Sloan, president of aviation news organization Airchive, told Business Insider.

Malaysia's recent tragedies have indelibly stained the reputation of an airline that has one of the
best safety records in the world. Until this year, Malaysia Airlines had experienced only two fatal
accidents in 68 years of operation. In fact, the last 19 years have been fatality-free. And the airline
regularly receives stellar marks for service and comfort from airline ratings agency Skytrax.

Despite high marks from passengers, the airline's financial performance over the years has been
dismal. With the Malaysian government holding a majority stake in the airline through its holding
company, Penerbangan Malaysia Berhad, Malaysia Airlines has become a veritable black hole that
sucks in money. Multiple government bailouts over the past decade were required keep the carrier
aloft.

In the past three years, the airline has lost an astonishing $1.2 billion, reports Businessweek. And
according to the CAPA Centre for Aviation, Malaysia Airlines lost a further $140 million in the first
quarter of this year alone, with business down 59%. In other words, the airline hasn't been profitable
for years. And it's unlikely to achieve profitability anytime soon.

With the loss of consumer confidence compounding the company's financial troubles, what's in
store for Malaysia Airlines? Here are three ways the company could turn around.

1. Rebrand

A potential solution is to simply rebrand the airline: Take the existing company and relaunch it with a
new logo and a fresh coat of paint. This strategy was successful for both ValuJet and Swissair, though
under different circumstances.

Malaysia Airlines REUTERS/Edgar Su

ValuJet was a budget airline that rebranded as AirTran Airways after a fatal crash and subsequent
financial losses in the mid-1990s.
While the company's transformation following its merger with AirTrain was nothing short of
spectacular, its situation differed greatly from Malaysia Airlines in both complexity and symbolism.

At the time of ValuJet's rebranding, it was a 5-year-old airline with a small, aging fleet of 15 short-
range DC-9/MD-80 series jets.

Malaysia Airlines, on the other hand, is nearly 70 years old, with a fleet of 100 aircraft, ranging from
smaller Boeing 737s to 500-seat Airbus A380 superjumbos. As Malaysia's flag carrier, the airline is
also a symbol of national identity, serving as a flying ambassador for the country.

Swissair's rebranding also offers some parallels. Swissair, known for its high-quality service and
strong financial performance, was referred to as the "flying bank" for many years. However, by the
late 1990s, after a decade of poor financial decision making , the Swiss national airline was struggling
to deal with massive amounts of debt. Its grim financial situation was worsened by the crash of
Flight 111 off the coast of Nova Scotia in 1998.

By 2001, the company announced it would have to liquidate its assets. SWISS International Airlines
arose from the ashes, and has since been rated as one of the best in the world. The success of SWISS
shows it's possible to rebrand a nation's flag carrier and recover financially. However, SWISS had two
advantages that Malaysia Airlines does not: Consumer confidence in the Swissair brand wasn't fatally
tarnished by the company's troubles, and Switzerland's aviation tradition was well-established.

SWISS Airbus A330-300 Wikimedia Commons/ Steven Byles

So Malaysia Airlines may have to do more than simply rebrand—it may need a top-to-bottom
overhaul.

Korean Air's revamp in the early 2000s offers some context, says Airchive's Sloan. In 1999, the airline
suffered three crashes in six months. Two were fatal.

Instead of simply rebranding, Korean Air made major internal changes. The airline brought in
Lufthansa to retrain its pilots, changed its corporate culture, and relaunched. Malaysia will have to
follow a similar playbook, Sloan says, adding, "they have to show the world they learned their
lesson."
2. Nationalize

There have been calls from inside Malaysia for the government to dump its investment in its money-
losing airline. However, Sloan believes the opposite is likely to happen: Not only will the government
pump more money into the airline, it will also nationalize it, he says. No country wants to lose such a
prominent international symbol at a time of weakness.

Nationalization could provide the airline with a temporary financial safe haven, buying time to
execute the sweeping changes needed to ensure long-term viability. In 2001, the New Zealand
government nationalized Air New Zealand and injected more than $700 million into the company
after the airline's failed merger with Ansett Australia drained its coffers. The nationalization allowed
Air New Zealand to make drastic shifts in its business model. Eventually, that airline returned to
profitability.

3. Merge

If the Malaysian government does not step up to the plate, another option for Malaysia Airlines is to
seek a merger. In the month before the crash of MH17, rumors sprang up about cash-rich Etihad
Airways' interest in acquiring shares of the airline. But since the crash, the Abu Dhabi-based carrier
has distanced itself from the rumors.

AirAsia Malaysia Airlines AP

One prospective partner for Malaysia Airlines may very well be a competitor: AirAsia, a low-cost
carrier that also operates out of Kuala Lumpur.

In the last 15 years, CEO Tony Fernandes has taken AirAsia from a tiny, debt-ridden operation to a
financial juggernaut. Much of its explosive growth has been at the expense of more established
regional competitors.

Now, Fernandes wants to jump into the long-haul game with the company's AirAsiaX brand. In fact,
the airline purchased 50 Airbus A330neo long-haul airliners at this month's Farnborough Airshow.

To remove a local competitor and bolster its transcontinental operation, AirAsia may be willing to
take on Malaysia Airlines' international assets for a reasonable price. It's not unheard of for a
younger regional airline to swallow up a large international carrier. In 2007, Brazil's Gol Airlines
purchased the remnants of the country's bankrupt national carrier, Varig. After the merger, Varig—
once Brazil's preeminent international airline—now operates as an arm of Gol Airlines.
In 2012, Malaysia Airlines and AirAsia actually agreed to $364 million stock swap that was nixed by
pressure from Malaysia Airlines' union. With the airline confronting an unprecedented crisis and
AirAsia enjoying a meteoric rise, it may make sense for the airlines to revisit their past agreement.