Does the Singapore Airlines and Malaysia Airlines partnership clear the runway for a future merger?

Malaysia Airlines (MAS), the Southeast Asian nation’s struggling flagship carrier, has unexpectedly agreed to explore a wide-ranging partnership on flights, cargo and aircraft maintenance with one of its fiercest rivals – Singapore Airlines (SIA) – in a move analysts say could herald a potential merger.

The announcement on Thursday harked back to their past – they were once one company, Malaysia-Singapore Airlines, but split in 1972 after Singapore separated from Malaysia seven years earlier.

SIA has won numerous airline accolades and is best known for its luxury service, which includes the world’s longest non-stop flight – a 19-hour trip from Singapore to Newark, New Jersey.

In contrast, MAS was bleeding cash for years and was nationalised with an injection of 6 billion ringgit (US$1.45 billion) in 2014 by Khazanah Nasional, Malaysia’s sovereign wealth fund. Today, it is under pressure from budget carriers and its reputation is still stained by the twin tragedies that took place over five months in 2014, when flight MH370 disappeared and flight MH17 was shot down over Ukrainian airspace.