Malaysia Airlines to buy 50 Boeing jets for $5.5 billion

India orders four maritime spy planes from Boeing

KUALA LUMPUR, July 27, (Agencies): Struggling Malaysia Airlines on Wednesday announced plans to purchase 50 Boeing aircraft for $5.5 billion as it continues efforts to recover from devastating twin disasters in 2014.

Malaysia’s national flag carrier said it had placed firm orders for 25 Boeing 737 MAX jets and had purchase rights for another 25. Deliveries are to commence in 2019.

New CEO Peter Bellew said the purchase of the aircraft, which are known for their fuel efficiency, would aid the airline’s recovery.

“This deal is a game-changer for Malaysia Airlines with much lower costs and greater efficiency which we will pass on to our loyal customers with lower fares,” Bellew said in announcing the deal.

Malaysia Airlines currently operates 56 Boeing 737-800s as well as smaller numbers of Airbus aircraft.

The devastating MH370 and MH17 disasters in 2014 pushed the perennially lossmaking airline to the brink of bankruptcy as bookings dried up.

MH370 disappeared on March 8 of that year, en route from Kuala Lumpur to Beijing with 239 passengers and crew.

Debris found in the Indian Ocean has confirmed the Boeing 777 went down but the reasons are unknown.

Four months after MH370 vanished, MH17 was blown from the sky by a suspected Russian-made ground-to-air missile over war-torn Ukraine, killing all 298 passengers and crew.

State investment fund Khazanah Nasional took the company private later that year, and in 2015 brought in German airline turnaround specialist Christoph Mueller.

Mueller soon launched a painful rescue plan that slashed 6,000 jobs and dramatically trimmed its route network.

But he abruptly announced in April that he would be leaving well before the end of his three-year contract for unspecified “personal reasons”.

He was succeeded on July 1 by Bellew, an Irish former executive with Irelandbased low-cost carrier RyanAir.

The airline is undergoing a $1.56 billion overhaul that included cutting 6,000 jobs and axing unprofitable routes.

Bellew, Ryanair’s former director of flight operations, took over July 1 from Christoph Mueller, a turnaround veteran

who recently resigned abruptly due to personal reasons.

Part of the management team under Mueller, who was hired last year, Bellew said the carrier is on track to become profitable by 2018 and that it aims to relist on the local bourse by March 2019.

The new 737 Max jets will be a “game changer” for the airline with sharply lower costs and greater efficiency, cutting fuel

cost as much as 15 percent, he said.

The planes will be used for routes to growth markets in China, India, Pakistan and South Korea, and their purchase will be financed using loans and internal funds.

Bellew said the deal will not affect the turnaround program and that it made more economic sense to buy rather than lease the planes.

“We will have a lot more to do in the next

five quarters to make sure the airline gets back on track but we are there at the moment,” Bellew said,

“Malaysia Airlines is now on a path to growth across the ASEAN region. This new aircraft order will set the stage for our continued recovery and success into the next decade,” he added.

Late last week, officials of the three countries searching for the disappeared

Flight 370 aircraft said the operation will be suspended once the current search area in the Indian Ocean has been completely scoured.

Meanwhile, India signed a contract on Wednesday to buy four maritime spy planes from Boeing Co for about $1 billion, defence and industry sources said, aiming to bolster the navy as it tries to check China’s presence in the Indian Ocean.