Wednesday, July 27, 2016

Malaysia Airlines, Boeing in US$5.5 billion deal to purchase 50 737 Max aircraft

Boeing and Malaysia Airlines Berhad (Malaysia Airlines) today inked a deal for 50 737 MAX aircraft worth US$2.75 billion. Shown here is a 737 MAX in the national carrier's livery. Pic: Courtesy of Boeing
PUTRAJAYA: Malaysia Airlines Bhd (Malaysia Airlines) and Boeing today inked a deal for 50 737 MAX aircraft with 25 firm orders and 25 purchase rights worth US$5.5 billion.

Malaysia Airlines Chief Executive Officer Peter Bellew said the deliveries would commence in 2019.

"The 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," he said in a statement.

Bellew said with the 737 MAX's longer range capabilities, Malaysia Airlines would be able to connect its passengers to more destinations in greater comfort.

The national carrier has operated almost every derivative of the 737 airplane family and took delivery of its 100th 737 aircraft in December 2014. Currently it operates 56 737-800s.

The signing ceremony between Malaysia Airlines and Boeing was witnessed by Transport Minister Datuk Seri Liow Tiong Lai and Malaysia Airlines' Chairman Tan Sri Md Nor Yusof.

Speaking to reporters later, Bellew said the new aircraft would reach a massive footprint in its short-haul route in Asia of up to five hours.

With the new aircraft, he said costs would go down by 40 per cent and operating expenses would ease by 15 per cent.

"I don't see any issue with getting the funding around these aircraft. They are very bankable assets," he added.

Bellew said the possible relisting of Malaysia Airlines on the stock market could take place by March 2019, depending on global market conditions.

Expressing his confidence that the national carrier will break even in 2018, he said: "We will be profitable by 2018. We have a lot of work to do in the next five quarters to make sure that Malaysia Airlines is back on track," he added.

Bellew also ruled out the possibility of adding the US to the carrier's route.

"The route is really expensive to operate and really expensive to lease and I see a lot of low hanging fruit all around the region rather than to fly to the States," he added.

Source: Bernama | Aviation | 27 July 2016

Malaysia Airlines orders 50 B737 MAX planes from Boeing

Boeing 737 MAX is a narrow body jetliner series as the successor to the Boeing 737 Next Generation series.
KUALA LUMPUR: Malaysia Airlines Bhd has ordered 50 B737 MAX aircraft from Boeing for US$5.5bil.

The planes, which are expected to be delivered from 2019, are to be used for the longer range flights.

“The purchase will be a game changer for the airlines,” said its new CEO Peter Bellew.

The Boeing 737 MAX is a narrow body jetliner series as the successor to the Boeing 737 Next Generation series.
 According to Boeing's website, the 737 MAX Efficiency delivers 8% lower operating costs than its main competitor while its advanced technology winglet increases fuel efficiency by 1.8% more. 

The new plane will also deliver better environmental performance while its superior fuel efficiency reduces carbon emissions.

The quieter 737 MAX also has a 40% smaller noise footprint than today's single-aisle airplanes. The purchase of these planes are part of the national carrier' plans to regain market share it has lost over recent years.

In a recent interview with StarBiz, he pointed out there will be no more staff and route cuts, instead there will be a period of refinement with lower fares for the Economy Class as the carrier tries to MAS will add six to seven new destinations next year, mostly flights into North Asia from KLIA2, Sabah and Sarawak, which will allow the airline to tap new segments of the market as it expands further into growth markets which are in the four-to-eight-hour flying radius.

“Most of the cost cutting is done, now it is about refinement. We have got better in our purchasing, handling cost is 50% lower, catering cost is 20% lower and fuel 5%-6% lower. It is getting much better. We need to be nimble and fly smarter,” he added.

MAS has cut 6,000 jobs and shrunk its network by 30%.

Source: The Star | Business | 27 July 2016

Boeing wins $2.75 billion Malaysia Airlines order for 25 Max Jets

Boeing 737 MAX is a narrow body jetliner series as the successor to the Boeing 737 Next Generation series.
KUALA LUMPUR: Boeing Co. won an order worth $2.75 billion from Malaysia Airlines Bhd. for 25 737 Max 8 jets as the Southeast Asian nation’s flag carrier expands its fleet for the first time since two fatal air crashes in 2014 prompted the government to take over the company.

The operator also has options for 25 more aircraft, with the combined deal valued at $5.5 billion at current list prices, the airline said in a statement Wednesday. Deliveries from the Chicago-based manufacturer are set to start in 2019. The options are for a mix of 737 Max 8 and 9 models, which, according to Boeing, have a list price of $110 million and $116.6 million each. Discounts are customary for large purchases.

The addition to its fleet may help Malaysia Air, which is in the midst of a 6 billion-ringgit ($1.5 billion) business overhaul, compete against a slew of budget carriers in the region. Passenger confidence in the carrier, now fully owned by sovereign wealth fund Khazanah Nasional Bhd., took a dive two years ago after Flight MH370 vanished on March 8, 2014 and another was shot down over Ukraine four months later.
 
Ensuring Continuity

The New Straits Times reported the potential order earlier this week. The Malaysian carrier currently has 56 737-800s, 15 A330-300s and six A380s in its fleet, according to its website.

The airline this month named Peter Bellew as chief executive officer, its third in two years, adding the appointment will ensure continuity in the execution of the turnaround plan. The Asian carrier is ahead of schedule with its restructuring, having reached break even recently, putting it on course for a full-year profit in 2018 as targeted, if not earlier, former CEO Christoph Mueller said in a June interview.

The plane purchases may help cut operating expenditure by about 15 percent, Bellew told reporters on Wednesday. The carrier’s turnaround plan is on track, and a re-listing of the stock is planned for March 19, 2019, he said.

This month, Boeing raised its long-term forecast for aircraft orders, saying the rise of discount carriers and growth in developing countries will fuel purchases despite recent economic turmoil from Brexit and a commodities slump. Airlines worldwide will order new planes valued at $5.9 trillion over the next two decades, it said July 11, up 4.1 percent from a year earlier. That would represent a total of 39,620 jetliners across the industry.
 
Source: Bloomberg | 27 July 2016

Thursday, July 21, 2016

MAS ready for PSC revision


KUALA LUMPUR: Malaysia Airlines Bhd (MAS) is not worried about the upcoming passenger service charge (PSC) revision but hopes the rates for Kuala Lumpur International Airport (KLIA) and Kuala Lumpur International Airport 2 (KLIA 2) will be the same. 

MAS chief executive officer Peter Bellew said the 51 other carriers now operating out of the two terminals in Sepang were also looking forward to the same charges. 

Normally, airports worldwide had a difference of US$1 to US$2 (RM4 to RM8) between terminals, but it was US$8.25 between KLIA and KLIA 2, he said. 

“To us in a year, it’s a cost of well over RM100 million, in terms of the differential (between KLIA and KLIA 2). I have been in this business a long time, so I am used to the pricing of airports. 

I have dealt with the pricing of airports in more than 200 locations in Europe and the United States,” said Bellew at a media briefing, here, yesterday. 

The current PSC at KLIA is RM65 for international destinations and RM9 for domestic travel. At KLIA 2, the charges for international and domestic destinations are RM32 and RM6, respectively. 

Malaysian Aviation Commission chief operating officer Azmir Zain had said it was reviewing the PSC and an announcement could be made by year-end. MAS announced recently that it would operate some flights to new leisure destinations from KLIA 2 next year. 

This means costs will be RM33 cheaper per passenger, or RM5,412 per flight. This, he said, would translate into annual savings of RM1.97 million for each daily flight. 

However, Bellew said MAS would stay only at KLIA should the PSC between the two terminals remain the same. “If the charges stay much higher at KLIA, we will have to operate some of the new flights at KLIA 2

But if they balance it out, we will stay where we are (at KLIA),” he said, adding that MAS would likely introduce up to eight new leisure destinations, primarily in North Asia, next year

The new routes, which would be announced in the next six to seven weeks, will not significantly have connecting traffic between KLIA and KLIA 2 as the majority of passengers would be inbound. 

As an aviation expert who has dealt with airport operations for more than 20 years, Bellew said he was impressed with the facilities at KLIA 2. 

The terminal, he said, was one of the finest developments that he had seen. He brushed off some of the highly-publicised issues regarding the terminal, such as ponding at the aircraft parking bays, saying it was among the normal teething problems of a new airport

“I have spent a lot of time over there (KLIA 2) myself. There are super baggage transfer systems, the immigration desk is very well set up and they have put in new travellators. 

So there is nothing wrong with the facilities over there. The shopping is obviously quite incredible. I shop at the Jaya Grocer there myself,” Bellew added. 

Source: New Straits Times | Business | 20 July 2016

Wednesday, July 20, 2016

Malaysia Airlines tries to regain lost market share, lower fares seen

KUALA LUMPUR: There will be no more staff and route cuts for Malaysia Airlines Bhd (MAS) but a period of refinement with lower fares for the Economy Class as the carrier tries to regain market share it has lost over recent years.

MAS will add six to seven new destinations next year, mostly flights into North Asia from KLIA 2, Sabah and Sarawak, which will allow the airline to tap new segments of the market as it expands further into growth markets which are in the four-to-eight-hour flying radius.

With passenger loads below 70% currently, MAS chief executive officer Peter Bellew said in his first media briefing since his appointment as CEO over two weeks ago that “we need to aggressively push our product... that is our biggest priority now”.

“Most of the cost cutting is done, now it is about refinement. We have got better in our purchasing, handling cost is 50% lower, catering cost is 20% lower and fuel 5%-6% lower. It is getting much better. We need to be nimble and fly smarter,” he added.

MAS has cut 6,000 jobs and shrunk its network by 30%. He also does not see the need to change the staff uniforms now, a topic of controversy recently, although he did add that it would be done next year.

The focus ahead is to get high-paying customers to fill the front end of the cabin. Hence, all the cabin refurbishment and upgrades in service quality is under way. But at the same time, he wants to change the airfare policy to cater to the relatively price-conscious customer amid a competitive landscape so that he can also fill the back end of the cabin.

That is why he said that MAS would remain a full-service international carrier, competing with the likes of Cathay Pacific and Singapore Airlines, but offering “relatively lower fares”. Bellew feels this message had not been communicated well to the consumer and wants to change that.

“It is possible for us to address all market segments with fares. We can do it since we have a modern revenue management system,” he added.

MAS will continue to ride on its partnership with Emirates to offer long-haul connectivity besides London, where it has daily flights.

He said with the product enhancement and aircraft refurbishment under way, the airline will “look ten times better from now”, with a sharper focus on its Business Class product offering. MAS will become more “generous with our frequent flier points, especially for business travellers as we have not been doing that”.

For the Economy Class, MAS will still offer free baggage, food, no extra charge for using credit cards and seating, but it will change the pricing policy.

“We are putting more fares in the lower bucket and they will be available when you book. Previously, the fares started from medium to relatively higher, but now, we will have 15% to 20% seats on the relatively lower fares and work progressively. This is not something we did previously but what most airlines do. We are changing the airfare pricing policy to offer greater value,” Bellew said.

On the six to eight new destinations, he said “we need to burst out of the cocoon, be smarter in running the business as there are many opportunities out there. We will start flights from KLIA 2 during the northern summer season, as the public wants good fares. These will not be connecting passengers”, he said.

The RM33 price differential in the passenger service charges (PSC) between KLIA and KLIA 2 was the reason to plan leisure flights out of KLIA 2. That will make it cheaper for MAS to operate out of KLIA 2, as the average profit airlines make is US$4-US$5.

“Ideally, the PSC charges for both terminals, KLIA and KLIA 2, should be the same. There are no such differences in charges in other parts of the world,” Bellew said.

Many have criticised his plan to fly out of KLIA 2, as it would split the airline’s operations. But Bellew said “it is not complicated and not a different country. There is no need for new staff and the aircraft will be dedicated from here”.

The Malaysian Aviation Commission (Mavcom) is working on new PSC charges, which it expects to announce by year-end. Bellew said if the charges stayed much higher at KLIA, then MAS would move to KLIA 2.

The airline will also need new aircraft going forward and Bellew expects to commit to aircraft orders soon. He, however, did not elaborate.

MAS will take delivery of six A350 aircraft. Four will be for the London route, while two remain undecided for now. The aircraft will be on lease but for future requirements, MAS has options to either go for sale and leaseback arrangements or source funding from capital markets. The airline has two leasing companies within its ambit.
 
Source: The Star | Business | 20 July 2016

Sunday, July 17, 2016

Make Rayani Air 'haram' for good

It is time Rayani Air is buried for good, for having duped customers and disgraced the local airline industry.
WHEN a Muslim dies, at the last rites, the family members would ask those who owe the deceased to either forego the debts he owed or claim it from his heirs.

For Rayani Air, which started the halal-airline saga and then was ‘haram-ed’, it seems that it is going to be buried with its passengers demanding their refunds from its grave. It should be happy if the angry passengers do not desecrate its grave for the refunds.

Rayani Air had apologised for not being able to refund despite its promises to do so, because investors pulled out when its flying licences were revoked.

"Dear customers, we apologise that we are still unable to make refunds on flight tickets despite our best efforts. The withdrawal of our Air Service Licence (ASL) and ASP (air service permit) were made while we were finalising investments in this airline. With the withdrawal of these licences, no investor will cooperate with us," it said in a statement on Facebook on Tuesday.

"With the withdrawal of licences, the investors who had committed to supplying funds on June 30 to resolve the refund issue has withdrawn from their commitment,” the airline claimed. 

It went on to say it is still hoping to be given another chance to take to the skies, so that it can make some money and then refund the customers. 

It has now started blaming the investors for its inability to pay its debts and is stating that it is the investors which caused its downfall.

Rayani Air is perhaps the shortest lived airline which thought it was actually going to make it big, and it continues to think it actually has the capability to do so despite its serious breaches which got it into the mess in the first place. 

The sad thing is that it embarked on the halal-airline logo to launch itself, thinking that Malaysians (authorities included) would tawakal (surrender to God) and fly it, never mind the fact that the owners were running it like some sundry shop

They are perhaps lucky that Malaysians are calmer people, and they have yet to have their offices turned inside out and the owners hounded. 

Yet, the very fact that Rayani Air has the nerve to even suggest a return smells of something, that there seems to be some cables by the owners and the authorities which seems to give rise to hope that they actually would make a comeback. 

The Department of Civil Aviation (DCA) and Malaysian Civil Aviation Commission (MAVCOM) should have nothign more to do with Rayani Air - it must be made history for good, but in its Facebook posting, it seems that there lingers a hope, when it asks its customers to be patient.

The owners may not be very smart, but they are not very stupid either - for they would not have been able to even start an airline in the first place if they were the latter. And the owners must have very strong underlinks to the authorities to be able to start a halal-airline (as they called it) when they were non-Muslims

Even a vegetarian non-Muslim would have a hard time getting a halal licence to start a food stall, let alone this airline which touted on is Islamic-ness and made a mockery of everything halal in Malaysia, only to do the most haram thing in business - which is to cheat its customers, after taking their money

Everyone - from the ministers to the officers - who signed the papers which allowed Rayani Air to even exist int he first place should be responsible for the refunds. We have yet to know how much or in how many hundreds of thousands the refunds due are in, but what is being told is that the owners are unable to pay because investors have pulled out. 

Rayani Air should be buried completely with a heavy tombstone on its grave, along with its owners’ licence to ever conduct any business of such sort, to ensure that Malaysians are never taken for such a ride with such a gimmick using religion.

And if Transport Minister Datuk Seri Liow Tiong Lai cannot openly tell off Rayani Air owners to get lost, then it is time he too resigned for this is just as scandalous as the Port Klang Free Zone fiasco during his predecessor Tun Dr Ling Liong Sik’s time.

Source: The Heat Malaysia | www.theheatmalaysia.com | By Zakiah Koya | 14 July 2016

Friday, July 15, 2016

Penerbangan domestik MAS akan beroperasi di Terminal KLIA 2

Pintu masuk utama ke Terminal KLIA 2, Lapangan Terbang Antarabangsa Kuala Lumpur (KLIA).
KUALA LUMPUR: Kerajaan pada dasarnya tidak ada masalah untuk membenarkan Malaysia Airlines Berhad (Malaysia Airlines) beroperasi di Terminal KLIA 2. 

Malaysia Airlines sebelum ini membuat permohonan untuk menggunakan Terminal KLIA 2 bagi penerbangan domestik, manakala bagi laluan serantau ia masih beroperasi di Terminal KLIA 1, Lapangan Terbang Antarabangsa Kuala Lumpur (KLIA). 

Sumber Putrajaya memberitahu, keputusan itu akan dibuat pada masa terdekat ini. "Mesyuarat mengenai cadangan Malaysia Airlines telah diadakan pada Isnin lalu. Beberapa perkara mengenai permohonan itu sedang diteliti oleh Suruhanjaya Penerbangan Malaysia (Mavcom)

"Ini termasuk isu-isu prosedur dan peraturan penerbangan. Namun keputusan mengenainya akan diputuskan tidak lama lagi," katanya kepada MalaysiaGazette.

Sumber itu berkata demikian ketika mengulas mengenai Malaysia Airlines untuk mempertimbangkan beroperasi di Terminal KLIA 2 berbanding Terminal KLIA 1 sekarang.

Cadangan syarikat penerbangan itu dikaitkan dengan kenaikan caj perkhidmatan penumpang (PSC) yang menyaksikan perbezaan sebanyak RM33.

Pada masa ini PSC di Terminal KLIA 2 bagi destinasi antarabangsa dan domestik masing-masing adalah RM32 dan RM6 berbanding RM65 dan RM9 di Terminal KLIA 1. 

Tambahnya, cadangan perpindahan operasi domestik Malaysia Airlines di Terminal KLIA 2 itu bertujuan mengurangkan kos operasi syarikat penerbangan tersebut.

"Ia selari dengan fokus Malaysia Airlines yang sedang dalam pelan pemulihan," ujarnya. 

Sumber: MalaysiaGazette | 13 Julai 2016