Malaysian sovereign fund Khazanah Nasional is reportedly pushing for a merger between Malaysia Airlines (MH, Kuala Lumpur International) and AirAsia X (D7, Kuala Lumpur International) to turn the two loss-making carriers into a profitable singular entity, The Malaysian Reserve newspaper has written.

The fund did not comment on the report, saying only that "the review of strategic options for Malaysia Airlines is ongoing and involves multiple parties that have expressed interest. Ultimately, the airline’s future is a policy decision that impacts various stakeholders including Malaysia Airlines, its staff and customers."

Several shareholders of the fund have reportedly objected to the merger, perceiving it as a bailout to the flag carrier.

Malaysia Airlines is wholly-owned by Khazanah Nasional, while AirAsia X is owned by AirAsia Group. The LCC's Group CEO Tony Fernandes has previously refuted speculation that AirAsia could participate in the restructuring of the flag carrier.

Khazanah Nasional and the Malaysian government have been weighing options over the future of Malaysia Airlines for the past few months but no decisions have been reached so far. Earlier this year, prime minister Mahathir Mohamad even suggested closing down the airline, although he later backtracked and focused on restructuring.