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