The national carrier, Swissair, says it is looking to become involved in the loss-making Malaysian Airlines.

Swissair spokesman, Jean-Claude Donzel, confirmed on Thursday that talks were underway between the two national airlines. "We are in discussions with Malaysian Airlines on a close commercial cooperation," he said.

However, Donzel refused to confirm that Swissair was planning to buy into the Southeast Asian carrier.

He was responding to comments by Malaysian Airlines chairman, Tajudin Ramli, who told the Singapore "New Straits Times" newspaper that three foreign carriers - Qantas, KLM and Swissair - were interested in purchasing a 29 per cent stake in the airline.

Tajudin said his airline was in "very, very serious talks" with its three competitors. His comments were taken as confirmation of months of reports that Malaysian Airlines - which ran up losses of $184 million (SFr310 million) last year - was looking to sell a controlling stake in the company.

Later reports said Qantas had decided to pull out of the running for a stake in the airline.

Analysts believe the future of Malaysian Airlines hinges on its ability to attract more foreign investment and enter a code-sharing arrangement with another airline. Sixteen percent of the company is already in foreign hands.

swissinfo with agencies

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