Friday 29 Mar 2024
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KUALA LUMPUR (Sept 21): Malaysia Airlines Bhd clarified today that its planned purchase of 16 new Boeing aircraft, for which it inked a preliminary deal with Boeing Co during a recent visit to the US with the Malaysian Prime Minister, is not a firm buy as yet.

"We would like to reiterate that as of now, we have a firm order of 25 Boeing 737 aircraft, with everything else being optional.

"The options, as well as a variety of other arrangements including the recent MoU (Memorandum of Underestanding) with Boeing, will allow us to have some flexibility in deciding which aircraft suits our operational environment best. Malaysia Airlines will continue to carefully evaluate all options available to us to ensure our purchases make both business and operational sense," Malaysia Airlines said in a statement today.

It said this was necessary and in line with ongoing prudent fleet management and cost containment efforts across the group. "Please also note that funding for all aircraft is planned on a sale-and-operating leaseback or simple operational lease," it added.

The clarification came after the announcement of its planned purchase, which was reportedly valued at some US$3 billion, drew flak from the public. The deal was announced during Prime Minister Datuk Seri Najib Razak's visit to the US to meet with President Donald Trump earlier this month.

Last year, the airline made 25 firm orders for the 737-MAX8 aircraft and 25 options. The aircraft, it said today, were ordered as pure replacements for 48 operating planes that are due for replacement beginning 2019.

The 48 existing planes are part of its current 54-aircraft fleet of 737-800; the balance six will be handed back to lessors in December this year.

In June this year, Malaysia Airlines inked a new agreement with Boeing that allows it to choose their new and larger 737-MAX10 aircraft for 10 out of the previous firm order of 25 737-MAX8.

This was followed by the MoU it inked last week with the American aircraft manufacturer to convert eight of the 25 firm orders into eight 787-9 carbon-composite Dreamliners, together with an intended order for eight 737 Max 8s jets.

"The list price for the eight Boeing 787-9 Dreamliner aircraft is some US$2.5 billion. The airline will negotiate extensively to ensure the best value on confirmation of order," said Malaysia Airlines today.

It stressed that it has been widely communicated it was exploring various options for widebody aircraft for possible delivery in 2018 and 2019 to address the rapid growth in international sales which requires additional widebody aircraft.
 
"The recent MoU to potentially add eight of the widebody Boeing 787-9 Dreamliner aircraft to our fleet from Quarter 3 in 2019 is to add capacity to the airline’s widebody fleet and provide a high level of quality on its most lucrative routes.

"The 787-9 has one of the longest ranges of any commercial aircraft and can operate non-stop from Kuala Lumpur to any point in Europe as well as key cities on the west coast of the United States. The same aircraft can similarly operate high quality services to Tokyo or flights of up to 17 hours, offering great flexibility for the airline to manage a variety of market opportunities over the next 20 years," it said.

It added that "if the order is confirmed, the initial 787-9 Dreamliner deliveries are planned for operating Asian services", and that the growth of the Malaysian economy and increasing globalisation will allow these aircraft to commence new long haul services from 2020 onwards if sufficient profitable demand exists.

In the mean time, the airline said it is also considering to go with either used Airbus A330-200/300 or new Airbus A330neo aircraft for its expansion and replacement of existing aircraft.

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