MAB reaffirms order of 25 Boeing 737s

PETALING JAYA: Malaysia Airlines Bhd (MAB) reiterated yesterday it has a firm order of 25 Boeing 737 aircraft “with everything else being optional”.

This comes as Boeing and MAB signed a memorandum of understanding (MoU) to acquire 16 aircraft, consisting of eight 787 Dreamliners and eight 737 MAXs, in Washington last week.

“The options, as well as a variety of other arrangements including the recent MoU with Boeing, will allow us to have some flexibility in deciding which aircraft suits our operational environment best,” MAB said in a statement yesterday.

MAB CEO Peter Bellew had said that it will not finance and own 16 new Boeing aircraft bought from the US aviation company. It was reported that large global leasing firms and lenders will instead purchase the aircraft and then lease the planes to MAB on an operating sale and leaseback agreement.

MAB has been questioned on buying more planes amid its restructuring after the prime minister announced the plan to buy additional planes for the airline during his recent working visit to the US.

The airline said yesterday it will continue to carefully evaluate all options available to ensure its purchases make both business and operational sense, which is necessary and in line with the ongoing prudent fleet management and cost containment efforts across the group.

It noted that funding for all aircraft is planned on a sale-and-operating leaseback or simple operational lease.

MAB currently has 54 aircraft in its fleet of 737-800 with 48 actually operating, as six of these aircraft are being handed back to lessors in December 2017 and are currently going through a lease return maintenance programme.

In 2018, it will operate 44 737-800 aircraft daily, with three in maintenance and one available spare. The 48 operating aircraft in the 737-800 fleet start reaching end of lease from early 2019.

“In 2016, we made 25 firm orders for the 737-MAX8 aircraft and 25 options. The aircraft were ordered as pure replacements for existing planes, due for replacement beginning 2019.

“In June 2017, we entered into a new agreement with Boeing to allow us to choose their new larger 737-MAX10 aircraft for 10 out of the previous firm order of 25 737-MAX8. With this agreement, MAB can decide to take either the MAX8 or MAX10. The MAX10 aircraft are expected to commence delivery in early 2021.”

The airline also said it has been 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 the third quarter in 2019 is to add capacity to the airline’s widebody fleet and provide a high level of quality on its most lucrative routes,” it noted.

MAB said the list price for the eight Boeing 787-9 Dreamliner aircraft is some US$2.5 billion (RM10.5 billion) and it will negotiate extensively to ensure the best value on confirmation of order.