Malaysia Airlines evaluating funding for nine 737 MAX jets

This article first appeared in The Edge Financial Daily, on July 26, 2018.
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KUALA LUMPUR: Malaysia Airlines Bhd is evaluating jet financing as an option for the purchase of nine Boeing 737 MAX planes, in its first approach to lenders since a restructuring exercise three years ago.

“At this stage, Malaysia Airlines is evaluating [all available] options, whether we want to fund it ourselves or get financing,” group chief executive officer (CEO) Captain Izham Ismail told reporters at a press conference yesterday, adding that a lease buy-back is also under evaluation.

Two years ago, Malaysia Airlines confirmed orders for 25 737 MAX jets with Boeing, on top of an option for another 25 aircraft, which the airline has yet to exercise.

Touching on the impending reintroduction of the sales and services tax, Izham said Malaysia Airlines expects “no impact on consumers” should air tickets be exempted from the tax as they were previously.

“We are still waiting for guidance from the Royal Malaysian Customs Department,” he said, but declined to comment on the ministry of transport’s (MoT) proposal to cap domestic air ticket prices during the festive periods. “Malaysia Airlines is guided by the MoT and Mavcom (Malaysian Aviation Commission) on the capping of prices. It is still [too] early for me to make a detailed comment, so it is best that we allow Mavcom to do their analysis.”

Last week, Transport Minister Anthony Loke Siew Fook was reported as saying that Mavcom was finalising its study on a suitable mechanism to control domestic airfares and that a solution is expected at the end of the month.

Yesterday, Malaysia Airlines signed a one-year agreement with four umrah tour operators — KRS Travel Sdn Bhd, ATS Global Travel & Charter, Ecoriths Leisure Travel & Tour, and Rayhar Travels Sdn Bhd — to provide air charter services for the umrah season from October 2018 to June 2019.

The total of 149 flights operated by Malaysia Airlines’ Airbus A380-800 aircraft mark the highest number of scheduled flights for the umrah season to date for Malaysia Airlines’ charter unit.

“We are honoured to be selected once again as the preferred carrier to transport over 70,000 pilgrims signed up with KRS, ATS, Ecoriths and Rayhar,” Izham said, adding the agreement is the largest in terms of passenger volume for umrah charter services.