Malaysia Air­lines to buy 35 wide-bod­ied planes

The Myanmar Times - Weekend - - International Business -

MALAYSIA Air­lines plans to buy 35 wide-bod­ied planes over the next year as part of a fleet re­struc­tur­ing to re­build its pre­mium busi­ness as it seeks to re­turn to prof­itabil­ity by 2018, its CEO said Wed­nes­day.

Peter Bellew said there is a mis­match at the mo­ment, with 70 per­cent of the air­line’s cur­rent fleet of 69 planes com­pris­ing sin­gle-aisle, nar­row-bod­ied air­craft for short- and medium-haul routes, mak­ing it ap­pear more like a low-cost car­rier. He said the air­line ex­pects to in­crease its fleet size to 80 planes by 2022, of which 45pc will be wide-bod­ied air­craft.

Bellew said wide-bod­ied planes are cost ef­fi­cient for busy re­gional routes, pro­vide higher rev­enue op­por­tu­nity in terms of cargo and seats, and al­low flex­i­bil­ity for the car­rier to re­turn to long-haul routes. The air­line axed all long-haul routes ex­cept to Lon­don un­der a US$1.5 bil­lion (K2.04 tril­lion) re­struc­tur­ing in 2014 that in­cluded ax­ing 6,000 jobs.

Malaysia Air­lines ear­lier this month inked a deal to buy eight Boe­ing wide-bod­ied 787-9 Dream­lin­ers and eight sin­gle-aisle 737 MAX jets. Some crit­ics how­ever, said the loss­mak­ing car­rier shouldn’t be pur­chas­ing new big planes at a time when it is still in the red.

Bellew de­fended the plane pur­chases. He said no new fund­ing would be re­quired be­cause the wide-bod­ied planes will mostly re­place nar­row­bod­ied ones that will re­tire over the next few years. He said the air­line plans to ar­range for a sale and lease back ar­range­ment for new planes that will cut cost and make it fi­nan­cially more com­pet­i­tive.

He said the car­rier also inked a deal this week to lease six used but newly re­fur­bished wide-bod­ied Air­bus A330-200 planes from leas­ing com­pany Aer­cap for six years through 2023. He said new wide-bod­ied planes be­ing con­sid­ered are ei­ther the Boe­ing Dream­lin­ers or the Air­bus A330­neo.

“It’s a very quick way for us to re­bal­ance our fleet ... we are go­ing from small planes to big­ger planes but at a lower cost and of­fer­ing bet­ter prod­ucts,” Bellew said, adding that the air­line aims to be­come a pre­mium fives­tar car­rier once again.

Malaysia Air­lines was ail­ing from mis­man­age­ment that sad­dled it with at least $1.7 bil­lion in losses since 2011. It reeled fur­ther with two air dis­as­ters in 2014. Flight 370 van­ished in March 2014 with 239 peo­ple on board and a sec­ond Boe­ing 777 car­ry­ing 298 peo­ple was shot down over Ukraine a few months later. The com­pany was re­moved from Malaysia’s stock ex­change the same year, with the gov­ern­ment pump­ing in 6 bil­lion ring­git ($1.5 bil­lion) un­der a rad­i­cal re­struc­tur­ing.

Bellew said the air­line’s busi­ness has re­cov­ered in China, Aus­tralia and most parts of the re­gion, with for­ward book­ing solid un­til De­cem­ber. He said pas­sen­ger load rose 17pc from a year ear­lier in the quar­ter through June while rev­enue in­creased 8 per­cent in the same pe­riod.

He said that the air­line is on track to re­turn to prof­itabil­ity next year un­der its re­vamp and that it could be el­i­gi­ble to be listed on the stock ex­change again in 2019. – AP

Malaysia Air­lines (MAS) Chief Ex­ec­u­tive Of­fi­cer Peter Bellew speaks dur­ing a press con­fer­ence at Pe­tal­ing Jaya, Malaysia on Septem­ber 27.

Photo: AP

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