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Mohd Azizul Ramli

A Possible Merger of MH and SQ

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First of all, let me emphasize that this topic is neither a fact nor a rumour.

 

It is something that I have been thinking about for a while in view of MH's current state. While it seems that they are no longer in the red (financiallly), I dont see MH has what it takes to become competitive in the longer term in the future due to its slow progress in term of product innovation (and replacement) and slow management decisions (red tapes and government's interference due to its 70% state owned status), which will resulted in them being in the red again in the not too long future. SQ on the other hand has leading the world in this league.

 

Bear in mind that the ASEAN open sky policy will take effect on 1 January 2009, which may see any airlines can fly from one ASEAN capital to another without any restriction. The SIN-KUL route, which has been duopolised by SQ and MH for 30 years will be opened to LCCs (AirAsia, Tiger and Jetstar) on 1 February 2008. ASEAN is trying hard to become an economic block like EU.

 

For the sake of MH's positive sustainability, is there a possibility for a merger between SQ and MH, just like what AF and KLM did on 5 May 2004?

 

The merger of AF and KLM created the largest airline company in the world in terms of total operating revenues, and the third largest in the world (the largest in Europe) in terms of passenger-kilometres. But despite the merger, both Air France and KLM continue to operate flights under their brand names as subsidiaries of Air France-KLM. The operate from 2 hubs, CDG and AMS which locate only 248 miles apart, with 554 aircrafts and 102,077 employees. They share the same FFP, i.e. Flying Blue and are part of Skyteam Alliance. Air France-KLM is one of the most profitable companies in Europe.

 

AF-KLM shareholdings are as follows:

- 37% former AF shareholders

- 21% former KLM shareholders

- 23.4% private shareholders

- 18.6% French government

 

Given the fact that the history of SQ and MH were rooted back in 1937 under Malayan Airways, I see this proposal as feasible. Actually, I think the merger between AF and KLM is far more complicated than that of SQ and MH. SQ and MH was once under MSA when Singapore withdrew from the Federation of Malaysia in 1965 before the split of the entity in 1972, which created SQ and MH. Prior to 1965 (or even 1972), SIN was the gateway into Malaysia/Malaya.

 

If this become a reality, we may see a high possibility of MH to be absorbed into Star Alliance and a huge fortune awaits KUL which has been longing to become a hub. SIN and KUL is 185 miles apart.

 

Any thoughts?

 

p/s I also posted the same thread in A.Net, just to have a global view of the topic. You can check it here.

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If this happen, we might be seeing MSA come back.

 

Azuddin

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With a twist. MSA was an entity. AF-KLM on the other hand, is a holding company of both AF and KLM. Both AF and KLM operate on their own, have their hubs close to each other and serve almost the same destinations. AF-KLM is going to include AZ soon, so this formula is proved to be successful.

 

We need a company as the holding company of both SQ and MH, which is being co owned by the Singaporean government, Malaysian government and SQ and MH shareholders.

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A plausible idea commercially, but will never happen due to political interference.

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MH don't even want to to join an alliance, now we are talking about merger?!

Edited by Seth K

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As long as some politicians on both sides can't agree on issues from major to trivial ones, I don't see that happenning. But then again, SQ has a deservedly prestigeous image that has endured for 35 years. They may not want to dilute their brand image.

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This kind of merger will do more good for SQ than MH. If this happens, we may see KUL as domestic hub and a focus city, while SIN will become a bigger international hub.

 

AF-KL can have their own separate entity and hubs, as both AMS and CDG are a very strong European hubs. KUL, on the other hand, is the weakest hub among SIN, BKK, and KUL.

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Hmm....let see, EK? Already has hub at BKK and SIN. EY? Their aircraft can reach everywhere. Well that leave MH and AK :yahoo:

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Guest Michael

Crazy thought but I still like u guys heaps, let us remember the sky is not the limit for MAS though

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i doubt that will happen unless Singapore rejoins the Federation of Malaysia. That is not likely to happen!

 

However, if SQ and MH merge - it will be back to the MSA days where SIN is the international hub and KUL is nothing more than a secondary hub.

 

Not good for Malaysia and MH

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:lol: strategy wise , it is good , but IMO this will not happen , as a malaysian myself , i dun really hope they will merge :p

 

 

 

 

 

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There is a need to look at the history as to why the merger of both airlines had gone separate ways instead.

 

I don't think SQ is interested in MH. SQ does not need MH to survive and similarly MH side does not need SQ to survive either. Mind you the merger could pave the way which spark some political or at times racial tension. Better keep things at status quo. My 2 cents.

 

Similarly the AK and MH merger will probably not happen due to the conflict in native and non-native interests.

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At least not until both settle the issue with JHB-SIN bridge... :p

 

interesting idea though...at that time the new issue would be to name it Malaysia-Singapore or Singapore-Malaysian Airlines...???

 

Who will win?, SMS contest.

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