GLOBAL SAFETY FEAR
Khazanah Nasional and MAS are reviewing plans to purchase aircraft following Ethiopia crash.
MALAYSIA Airlines (MAS) is evaluating its middle- and longterm fleet requirements based on the next phase of its turnaround strategy.
The national carrier said it had written to American aircraft manufacturer Boeing to seek more technical details ahead of the carrier’s delivery order expected next year.
MAS was responding to questions about whether the airline was considering cancelling the order in light of the recent fatal crash of the Ethiopian Airlines flight on Sunday morning involving a new Boeing 737 MAX 8.
MAS had, in July 2016, announced an order of 50 Boeing 737 MAX aircraft valued at US$5.5 billion at list prices. The deal consists of 25 firm orders and 25 purchase rights.
MAS said the aircraft were expected to be delivered beginning in June next year, adding that the airline would update the market once a decision was made.
“However, it is still too early to make any comments as the cause of the incident has yet to be ascertained. However, safety is of the utmost importance for the airline and we are taking the incident very seriously,” a MAS spokesman told the New Straits Times yesterday.
Earlier, Economic Affairs Minister Datuk Seri Azmin Ali asked Khazanah Nasional Bhd to review MAS’ purchase of the aircraft.
It was reported that the Ethiopian Airlines flight en route to Nairobi, Kenya, crashed minutes after taking off from Addis Ababa, killing all 157 people on board. Victims were from 35 countries.
The incident was the second tragedy involving a Boeing plane in less than five months, following the Lion Air flight that crashed over the Java Sea in October, killing 189 people.
There has been no evidence that the two incidents are linked in causality.
Previously, MAS group chief executive officer Captain Izham Ismail had said the airline would need a replacement programme once the airline was stable. Only then could it consider new aircraft purchases.
He said there were several options to procure new aircraft, such as through internal funding, bank financing or dry lease from lessors.
He said Malaysia Airlines currently had the right number of aircraft, consisting of six Airbus A380s, six A350s and 21 A330s, besides 48 B737-800s.
“We are very cautious in our investment portfolios, in particular plane purchases. The MRP (MAS Recovery Plan) saw a re-design of our network where focus is now on the Asia-Pacific region.
“This is where the two huge growth markets — India and China — are.
“We are well-placed to capitalise on this, and leveraging strongly with our partners is the key,” he told the NST.
Airlines in China grounded all Boeing 737 MAX aircraft after receiving a notice from the Civil Aviation Administration of China yesterday as a safety measure. It was reported that airlines in China operate more than 90 Boeing MAX aircraft.
Since its inception in 2017, the 737 MAX was Boeing’s latest updated version of narrow-body and fuel-efficient short-range aircraft in the market.
Airlines that operate the aircraft include Norwegian Air and Alitalia, which are members of the Star Alliance.
AMERICAN aircraft manufacturer Boeing Co faces sales concerns for its best-selling B737 Max after two deadly crashes involving the aircraft in less than five months.
Several countries including China and Indonesia have grounded their B737 Max 8 fleet after one flown by Ethiopian Airlines crashed minutes after takeoff from Addis Ababa airport on Sunday.
On October 21 last year, a similar plane flown by Lion Air, Indonesia’s largest budget carrier, plunged into the Java Sea 12 minutes after takeoff.
Malaysia Airlines, AirAsia and Malindo Air are not operating any B737 Max.
However, Malaysia Airlines will see its first delivery of B737 Max 8 next year. The airline made 25 firm orders with 25 purchase rights of the model in 2016 for US$5.5 billion (RM23 billion).
Sources told the NST the national carrier had not made any new decision on the status of the order, although Economic Affairs Minister Datuk Seri Azmin Ali had asked parent Khazanah Nasional Bhd to review it.
“Inquiries on the plane have been sent to them (Boeing). We’re closely following the reports on the Ethiopia incident,” said one of the sources.
Three years ago, the then Malaysia Airlines chief executive officer Peter Bellew had said during the announcement of the plane order that the Max 8 could be a game changer for the airline.
Boeing is in a race for supremacy with Airbus SE, with the duopoly banking on single-aisle planes such as the B737 Max and Airbus A320.
Both aircraft are the workhorses of budget carriers and the choice for long-distance full-service airlines.
The A320 is well ahead in the race with about 6,000 orders for the new-engine variants of its A320 family last year, based on Bloomberg Intelligence data.
Boeing had a total of 5,011 B737 Max 8 orders, including a backlog of 4,661, up to January 31, according Aerotime.aero portal.
Lion Air and VietJet Air are Boeing’s two largest customers in Asia. The Vietnamese low-cost carrier recently confirmed a deal to buy 20 Max 8 and 80 of the larger Max 10 variant.
Meanwhile, Boeing did not comment on its Max 8 aircraft but instead offered condolences to the families of the 157 people who died in the crash on Sunday.
“A Boeing technical team will be travelling to the crash site to provide technical assistance under the direction of the Ethiopia Accident Investigation Bureau and the United States National Transportation Safety Board,” it said in a statement.
An International Air Transport Association spokesman told NST yesterday the priority was to find the factors that contributed to the crash.
“It is premature to say what caused the crash and what action should be taken,” he said.