Malaysia Airlines head says KLM - Swissair - Qantas considering stake

Tajuddin Ramli, who is MAS executive chairman, confirmed market rumours for the first time that the MAS was talking to the three airlines. Any announcement to the foreign shareholders would be made early next year, he told the New Straits Times daily. "Discussions are ongoing with KLM, SwissAir and Qantas. The three parties are very, very serious in buying into Malaysia Airlines," he said, adding that AirFrance also has shown interest. SwissAir has confirmed its representatives have met MAS officials and are conducting due diligence on the airline.

Tajuddin, who is one of Malaysia's leading corporate figures with businesses ranging from telecommunications to aviation, obtained control of MAS in 1994 when he bought a 30-per-cent stake for 1.8 billion ringgit (473.7 million U.S. dollars). He had bought the shares from the central bank, and under the deal, he agreed to sell back the shares to the government if he wanted to relinquish hold on MAS. Tajuddin said talks with the government on buying back his MAS shares were almost concluded, saying he hoped they would be finished by year's end. The government, which holds a symbolic single share in MAS that gives it veto rights on any major equity shake-ups in the national carrier, said recently that it would allow a foreign airline to hold a major stake in MAS. The move was made to help turn around MAS, which has been saddled by mounting debts and financial woes since it was privatized.

MAS officials, however, have complained that the airline was unable to fully exploit its potential for profits because the government forces it to keep domestic air fares low and to fly to unlucrative domestic sectors because of national and political interests.

(dpa)