CEO: MAS ex­pects de­ci­sion by mid-June

New Straits Times - - Business -

KUALA LUMPUR: Malaysia Air­lines Bhd (MAS) ex­pects to fi­nalise its plans to lease air­craft from a third party, most prob­a­bly Ital­ian na­tional car­rier Al­i­talia, within four weeks.

Its chief ex­ec­u­tive of­fi­cer Peter Bellew told NST Busi­ness the na­tional car­rier was talk­ing to sev­eral air­craft lessors and air­lines world­wide on se­cur­ing a leas­ing deal.

MAS is ac­tively look­ing for air­craft to lease as part of its short-term plan to keep up with the ris­ing de­mand of pas­sen­ger travel while await­ing new plane de­liv­er­ies.

“We ex­pect a de­ci­sion to go ahead or not go ahead in the next four weeks. We will only go ahead if we get the right fi­nan­cial deal,” he said in an email re­ply yes­ter­day.

MAS is keep­ing its op­tions open, al­though Bellew has ex­pressed in­ter­est to lease up to eight wide-body Air­bus A330200 from fi­nan­cially-strug­gling Al­i­talia.

He said the Al­i­talia planes were re­cently re­fit­ted with a nice con­fig­u­ra­tion of 20 busi­ness-class, 17 pre­mium-econ­omy and 219 econ­omy seats.

“I would pre­fer 26-plus busi­ness (seats) but the cur­rent lay­out would be fine for re­gional use if the price was right,” said Bellew, adding that the A330s had a flight du­ra­tion of up to 14 hours.

Any leases would quickly in­crease num­ber of busi­ness-class seats as the de­mand for those seats on MAS flights was sur­pris­ingly high, he added.

Al­i­talia, which was de­clared bank­rupt last month, is go­ing through spe­cial ad­min­is­tra­tion pro­ceed­ings, which could re­sult in an­oth­bailout er from the Ital­ian gov­ern­ment, a sale or a com­plete shut­down.

The air­line op­er­ates 14 A330200 air­craft, which are all leased from var­i­ous lessors which in­clude Castle­lake Avi­a­tion, Apollo Avi­a­tion Group, In­trepid Avi­a­tion, Air Lease Corp, MD Avi­a­tion Cap­i­tal, A.P.C Air­craft Pur­chase Co, Aergo Cap­i­tal and its eq­uity part­ner Eti­had Air­ways.

Bellew said MAS had con­tact with all ex­cept two lessors in­volved, which he did not name.

How­ever, Al­i­talia may sur­vive an­other bank­ruptcy as Bellew said the air­line could con­tinue op­er­a­tions as a medium-long­haul car­rier.

“I think now that Al­i­talia will sur­vive as a long-haul medi­umhaul air­line and will need these air­craft (A330-200) for the long term. I could be wrong, of course, but that is my opin­ion,” said Bellew.

Sources in the avi­a­tion in­dus­try said MAS was also talk­ing to air­craft lessors and air­lines from the Mid­dle East as part of its op­tions to se­cure planes for short­term.

“There are many grounded planes in the Mid­dle East. Most of them be­long to air­lines that are based there.

“MAS could pos­si­bly get a good leas­ing deal from them,” said the sources.

Al­though de­tails of the dis­cus­sions are kept se­cured, com­mer­cial air­craft leas­ing com­pa­nies in the Mid­dle East are grow­ing to ri­val the likes of China-based air­craft lessors such as BOC Avi­a­tion.

But ul­ti­mately, Bellew said, MAS would be buy­ing new planes in the next few years.

The na­tional air­line made a come­back last year af­ter two un­for­tu­nate dis­as­ters in­volv­ing Flight MH370 and MH17 in 2014.

Bellew said the MAS brand re­mained strong as pas­sen­gers, travel agents and the pub­lic had re­turned to the air­line af­ter it worked tire­lessly from last year to re-en­gage with them.

In the first quar­ter of this year, MAS’s over­all load fac­tor in­creased by 12.9 per cent year-onyear to 3.6 mil­lion pas­sen­gers. Bilqis Ba­hari

Malaysia Air­lines Bhd chief ex­ec­u­tive of­fi­cer Peter Bellew says the air­line will only go ahead with the air­craft leas­ing plan if it gets the right fi­nan­cial deal.

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