Khazanah Nasional Bhd. has hired Morgan Stanley to look at strategic options for Malaysia Airlines Bhd., according to an official in the prime minister's department.

The investment bank was brought in as an independent adviser for the airline's recovery plan, Md Farid Md Rafik, a deputy minister in Mahathir Mohamad's department, said in parliament Wednesday, confirming a Bloomberg News report. The government is willing to become a minority shareholder in the carrier, Md Farid said, implying a stake sale is among options under consideration.

We are looking to study all the available strategies, Md Farid said. "To view -- from the standpoint of an independent party, not from Khazanah and not from the government -- all the suitors interested in coming up with proposals, coming up with strategic options to help turn Malaysia Airlines around."

Khazanah, Malaysia's sovereign wealth fund, is the sole shareholder of Malaysia Airlines after taking it private in 2014 following two tragic incidents: one of its planes vanished over the Indian Ocean and another was shot down over Ukraine. While the carrier's revenues have been rising during the past year, overcapacity in Asia and external volatility including the U.S.-China trade war are expected to weigh on growth.

No Compromise

Suitors for Malaysia Airlines must have expertise in the industry with strong financial standing, Md Farid said. The government will not compromise on the carrier's branding and won't allow any layoffs among its 14,000 local employees, he said.

While Mahathir has said the carrier still faces the possibility of being shut down as the government seeks to save money, he also emphasized that he wants the airline to recover and keep "Malaysia" in its name. The government is studying four proposals it received for the airline, most of them from local investors, the prime minister said earlier this month.