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Mohd Azizul Ramli

MAS New 15 A330-300X + 4 A330-200 Freighter

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I strongly suspect that MAS' exclusive A333 order is also used as some negotiating ploy with Boeing. I am sure that the TOTAL COST (not just running costs) of the A333 is superior to anything Boeing can offer right now, in view of the A380 compensation that MH will be seeking for the further delay in deliveries. If Boeing does not want to be shut out of future wide body orders, then it had better come to MH with a better deal plus delivery slots that are earlier than 2020.

 

Although letter of intent and MoU may not be legally binding, but should be signed with good faith and intention to be follow by contractual agreement. When LoI is issued or MoU is signed, implied both parties concluded the deal in spirit and allowing legal teams to complete the proper agreement.

 

To use LoI or MoU as a bargaining tool, to pressure third party to improve offer is unethical and unfair. Although Boeing and Airbus may be rival, doubt they will submit to this low and dirty trick.

 

Given how purchase decision is made in this country, the best and cheapest is unnecessary will secure the contract but the one with the strongest cable and the right package. Unless the vendor didn’t deliver his promise to the decision maker, doubt anyone can swing the deal.

 

MH A380 production slots were MSN018, MSN024 and MSN032. Qantas to receive MSN029 A380 next week. It seem MH has been very kind to give up early slots for other A380 operators.

 

 

:drinks:

Edited by KK Lee

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Although letter of intent and MoU may not be legally binding, but should be signed with good faith and intention to be follow by contractual agreement. When LoI is issued or MoU is signed, implied both parties concluded the deal in spirit and allowing legal teams to complete the proper agreement.

 

To use LoI or MoU as a bargaining tool, to pressure third party to improve offer is unethical and unfair. Although Boeing and Airbus may be rival, doubt they will submit to this low and dirty trick.

 

Given how purchase decision is made in this country, the best and cheapest is unnecessary will secure the contract but the one with the strongest cable and the right package. Unless the vendor didn’t deliver his promise to the decision maker, doubt anyone can swing the deal.

 

MH A380 production slots were MSN018, MSN024 and MSN032. Qantas to receive MSN029 A380 next week. It seem MH has been very kind to give up early slots for other A380 operators.

 

 

:drinks:

 

Well, I don't understand the management since they are giving up early slots but they claimed that there's a delay by AIRBUS. Again what can i say other than another silly excuse.... seems like the management doesnt even know if they really needs the A380s or not

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According to SQ, operation cost of A380 is 2 to 3% higher than 744 but carry about 96 pax (25%) more. Financially and economically, airline should replace all 744 with A380.

 

On the increased capacity, with the right marketing and pricing, it shouldn’t be difficult to fill these extra seats on high demand routes like kangaroo.

 

:drinks:

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Well, that reveals that MH does not have a smart management team to evaluate the long term benefits of specific aircraft before placing an order....in my opinion, apart from huge discounts, external influence such as political reason are just probably the reason behind that they ordered the A33E.

Edited by Kenneth T

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Well, that reveals that MH does not have a smart management team to evaluate the long term benefits of specific aircraft before placing an order....in my opinion, apart from huge discounts, external influence such as political reason are just probably the reason behind that they ordered the A33E.

 

Not that MH management don’t know what they want or which aircraft suit them the best; it is just that, the authority is beyond them :pardon:

 

Normally, big ticket purchase move from committees (where management input their idea) to PMB, MoF, PMD and the board for approval. However, it seems, current practice is from very top down with little management input.

 

:drinks:

Edited by KK Lee

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Except why did MH order the 380 in the first place when the only reason is LHR. If Mh wants to make money it either have a product like SQ or be like BI very cheap fares and have better presentation, service than the US bunch and that is currently MH as bad as UA, AA, US. If Mh wants profit and a brand name either ditch 380's and 330's or if they want to be like SQ or BI keep the 380 and converge the 330 orders to 350's -lr, 1000 and 900. Or even ditch the MOU and go for the 787-8 and 9 and lease some 777LR so they can start Jfk and LAX and include a service to Brazil. Sorry don't know much about the 350, I'm a Boeing man.

 

According to SQ, operation cost of A380 is 2 to 3% higher than 744 but carry about 96 pax (25%) more. Financially and economically, airline should replace all 744 with A380.

 

On the increased capacity, with the right marketing and pricing, it shouldn’t be difficult to fill these extra seats on high demand routes like kangaroo.

 

:drinks:

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Well, I don't understand the management since they are giving up early slots but they claimed that there's a delay by AIRBUS. Again what can i say other than another silly excuse.... seems like the management doesnt even know if they really needs the A380s or not

 

Taking delivery of the A380s now may not be a good thing. Its better to receive A380s later since the pax demand has reduced. At the same time they can get some compensation from AIRBUS. Though the compensation might not be for MAS still it's a huge saving for the owner of the A380s.

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currently MH as bad as UA, AA, US.

 

Please, never say this again.. ever.

 

MH is not the best in the world, but sometimes people just don't appreciate how good they really are.

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Taking delivery of the A380s now may not be a good thing. Its better to receive A380s later since the pax demand has reduced. At the same time they can get some compensation from AIRBUS. Though the compensation might not be for MAS still it's a huge saving for the owner of the A380s.

 

Let's not forget A380s will no longer be something new by then and MH will certainly not the only airline to operate the beast in the sky.....again the management stressed that they do not need the B747 and i dont see any reason why they ordered the A380s. It seems like what they said earlier always contradict by the announcement made later. This is MH..no surprise....

 

Not that MH management don’t know what they want or which aircraft suit them the best; it is just that, the authority is beyond them :pardon:

 

Normally, big ticket purchase move from committees (where management input their idea) to PMB, MoF, PMD and the board for approval. However, it seems, current practice is from very top down with little management input.

 

:drinks:

 

MH should owns it's own fleet instead of leasing from PMB. MH has been flying for many years and i don't see that they cant evaluate the the long term benefits of an aircraft before placing an order. I thought the management's future is to have it's own fleet? Like what had been said before....this is Malaysia...bolehland

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Let's not forget A380s will no longer be something new by then and MH will certainly not the only airline to operate the beast in the sky.....again the management stressed that they do not need the B747 and i dont see any reason why they ordered the A380s. It seems like what they said earlier always contradict by the announcement made later. This is MH..no surprise....

 

Kenneth, I agree 100% with your thoughts of the contradict by MH management itself to continue accepting delivery of the A380 despite its turnaround plan clearly stating that the 747 is too large an aircraft for their network (as far as their plans are concerned). On that line, I was expecting more 777, but then they went for the A330 which is fair enough. Hopefully PMB takes delivery of the A380 but then leases them off to some other players in the market, rather than shoving it down MH's throat. MH bottomline could well be at stake - a turnaround plan that works in 360 degrees, back to square one! :pardon:

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Kenneth, I agree 100% with your thoughts of the contradict by MH management itself to continue accepting delivery of the A380 despite its turnaround plan clearly stating that the 747 is too large an aircraft for their network (as far as their plans are concerned). On that line, I was expecting more 777, but then they went for the A330 which is fair enough. Hopefully PMB takes delivery of the A380 but then leases them off to some other players in the market, rather than shoving it down MH's throat. MH bottomline could well be at stake - a turnaround plan that works in 360 degrees, back to square one! :pardon:

 

There's no surprise at all, in Malaysia, politicians are good at empty talk followed by empty promise....the government is currently MH's largest shareholders ...few years back, when MH is in trouble, DATO Idris Jalal was appointed as the CEO, a right and capable person who manage to turnaround the airlines but now he was appointed to assist the PM....sad to say that, this is Malaysia...what can we expect?

Edited by Kenneth T

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Slightly off topic but similar

 

UPDATE 1-China Eastern Airlines to buy 16 Airbus A330 planes

Mon Dec 28, 2009 9:33am ESTRelated NewsChina Eastern to invest $52 mln in Hefei airport

Mon, Dec 21 2009

Safran/GE venture wins lucrative China plane deal

Mon, Dec 21 2009

UPDATE 6-Buyers outline deal on A400M after debut flight

Fri, Dec 11 2009

United Airlines places $10 billion plane order

Tue, Dec 8 2009

REFILE-UPDATE 4-United Airlines places $10 bln plane order

Tue, Dec 8 2009Stocks

China Eastern Airlines Corporation Limited

600115.SS

¥6.08

-0.05-0.82%4:00pm UTC+1000

China Eastern Airlines Corporation Limited

0670.HK

HK$2.73

-0.01-0.36%5:01pm UTC+1000

European Aeronautic Defence and Space Company EADS N.V.

EAD.PA

€13.68

-0.05-0.36%6:46pm UTC+1000

* To buy 16 Airbus A330 planes

 

Stocks

 

* Planes to be delivered from 2011 to 2014

 

* Says deal valued at around $2.6 bln

 

* EADS shares down 0.1 percent

 

(Adds detail, background)

 

PARIS, Dec 28 (Reuters) - China Eastern Airlines (600115.SS) (0670.HK) said on Monday it had agreed to buy 16 Airbus (EAD.PA) A330 planes, giving a boost to the European planemaker as companies compete to gain a foothold in the fast-growing market.

 

China Eastern Airlines said in a statement the average basic price of the aircraft in total was around $2.6 billion, based on the relevant price catalogue in 2007. It added the planes were due to be delivered from 2011 to 2014.

 

Shares in EADS, the European aerospace group which owns Airbus, were down 0.1 percent at 13.61 euros in early afternoon trade.

 

Both Airbus and its U.S. rival Boeing (BA.N) have been working hard to secure orders in China, where demand for planes is set to increase as the country's economy continues to grow.

 

Airbus' latest Chinese order comes a week after the CFM International aero-engines joint venture of French group Safran (SAF.PA) and its U.S. partner General Electric (GE.N) won a multibillion dollar deal to supply engines for China's future C919 plane. [iD:nLDE5BK02N].

 

China also has ambitions of its own in the aviation sector. In 2008, Beijing merged its own two state aircraft makers, AVIC I and AVIC II, to pool resources for a jet project to help wean itself from reliance on Boeing and Airbus.

 

EADS shares have risen around 13 percent since the start of 2009, having fallen 45 percent last year.

 

From http://www.reuters.com/article/idUSLDE5BR0R520091228?type=marketsNews

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There's no surprise at all, in Malaysia, politicians are good at empty talk followed by empty promise....the government is currently MH's largest shareholders ...few years back, when MH is in trouble, DATO Idris Jalal was appointed as the CEO, a right and capable person who manage to turnaround the airlines but now he was appointed to assist the PM....sad to say that, this is Malaysia...what can we expect?

 

 

being from indonesia, the case of MH is very similar to that of GA in the past when for every decision made, the government (or some people in the government) have (or insist) the final say. luckily things changed and the current management team did have a deal with the government before they were appointed, that the govt would not interfere with the business side of the airline. everybody breathe a sigh of relief when mr.emirsyah satar, the current CEO who masterminded the reform of GA, is not appointed ministry of transport though he was nominated earlier. analyst welcome the govt decision to leave the right person at the right place and continue what he is already doing well. in the past, the govt did exactly what the malaysian govt did to MH as the largest shareholder. they decided which routes the airline should serve, out of pride and prestige, which planes to order bla bla bla.

everyone was disappointed when GA, at the beginning of its reform 5 years ago, drastically downsized their operation, returning 25% of the fleet to lessors, and cutting their routes to almost half! i mean, what were they doing, a flag carrier and we didnt fly anywhere? but now i believed more and more people were looking at it more positively. there was no point flying 'cool' routes such as jakarta-brazil when it would only put the airline in a financial bloodbath... end result, GA is one of the few airlines who do make very healthy operating profit this year, more than last year. heard that they never actually expected to welcome the A332 this year, not even had any plan for it, but when hainan airlines decided not to take up their order, the management was quick enough to catch them up, albeit with a really good deal from airbus! the A333 too, is undergoing major retrofitting, the first of which had been completed and is looking really cool... i just wanna say, actions like this were in the past, decided and controlled by the govt, who didnt care about the business side at all. hopefully MH can break itself free from such a bond with the govt sooner and start operating as it should be. i read somewhere that the profit this year is thanx to massive fuel hedging while they actually suffered quite heavy operational loss, hopefully they can recover and do better..

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China eastern ordered A330'S and will receive all the 16 a/c by 2014. MH ordered A330 before them but will only finish receiving them a cool 2 years after china eastern.

 

And I thought MH management said they were in a rush to swap their antique Airbus fleet.

Edited by jadivindra

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Unfortunately, the government still interfere MH's management. I don't see the reason that the right and capable person was requested to assist the government with the KPI, which is waste of the RAKYAT's money....until to date, not many concrete improvement made

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Unfortunately, the government still interfere MH's management. I don't see the reason that the right and capable person was requested to assist the government with the KPI, which is waste of the RAKYAT's money....until to date, not many concrete improvement made

 

Off-topic. In bolehland, dont expect changes to take place overnight.

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Off-topic. In bolehland, dont expect changes to take place overnight.

 

Yup, precisely but certain things can happen overnight to the benefits of certain political party, we all know that.

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MH's MD/CEO's take on the purchase of the 15 A333s in a New Year interview with The Star.

 

Why did you choose Airbus and not Boeing?

 

Azmil: We’ve chosen to buy up to 25 A330s. This particular decision is a bit different from how we normally approach decisions. For example, when we were looking at the 737-800 replacements, we issued requests for proposals to both Boeing and Airbus. And there was a full and normal competition between them. In the end, we decided on Boeing, with its 737-800 aircraft. In this case, we are buying the new A330s, which Airbus calls the “enhanced A330s”. We already operate A330s in our fleet. So that is an aircraft we are familiar with. And in the long term, we are either looking at the B787s or the A350s, although we haven’t really looked at the timing.

 

So the A330 made a lot of sense for us because we were already familiar with the aircraft. For example, if we were to switch to the Boeing equivalent today, it would be the B767. The adjustment period for us to go from the A330 to the B767, and later on to another aircraft type, would have been difficult. In this case, our pilots are already trained on the A330 aircraft, we already have spares for the A330s, and our maintenance people are used to the A330. It makes sense for us to continue using the A330.

 

 

Is this A330 more fuel-efficient, hence ensuring better yields for MAS in the future?

 

Azmil: Yes, the new A330 does a lot of things for us. On the cost side, it is more fuel-efficient that the current A330s that we have. Maintenance cost is lower due to its enhanced features. Another benefit is that it has longer range than our current A330. So we’re able to use it for more missions than we’re able to do with the current A330. We can optimise the cost for the A330, as it is designed for medium haul. We can use it on more routes than the current A330, which will also help us to reduce cost. On the revenue side, it will really help us to upgrade the product. It enables us to refresh the product, to give something that is more modern and cutting edge. And to our customers a better experience. So, yes, I think we will be able to sell more tickets, and customers will also be willing to pay more for the tickets.

Full interview: http://biz.thestar.com.my/news/story.asp?sec=business&file=%2F2010%2F1%2F2%2Fbusiness%2F5386082

 

MH will purchase either the B787s or the A350s.

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MH will purchase either the B787s or the A350s.

 

"will purchase"? doesnt say as such that MH "will" acquire them. More of "contemplating" either of these two as potential acquisitions.

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It seems a bit weird to me, because in terms of size, the 787 and A350 don't really compete with each other, do they?

 

The biggest 787 is just about as big as the smallest A350.

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MH's MD/CEO's take on the purchase of the 15 A333s in a New Year interview with The Star.

 

 

Full interview: http://biz.thestar.com.my/news/story.asp?sec=business&file=%2F2010%2F1%2F2%2Fbusiness%2F5386082

 

MH will purchase either the B787s or the A350s.

 

In the above interview the MH Md said that if they were to switch to Boeing equivalent for A330, it will be the 767. Really?Is this true? I thought it would be more of T7 family.

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In the above interview the MH Md said that if they were to switch to Boeing equivalent for A330, it will be the 767. Really?Is this true? I thought it would be more of T7 family.

 

Well yes, because the 777 is not a direct replacement of 767. There is this A-market 777, which is the 777-200 (non-ER), it was supposed to be a direct competitor of A330 (the 777-200ER is a competitor of A340-300). It turned out that the A330 is more fuel efficient than the 777-200. Cathay Pacific is one of the few operators of both 777-200 and A330-300. I read that Cathay was trying to dispose of the 777-200 as they were more happy with the A330-300 in the A-market segment. The 777-200/300 on the other hand, was conceived as the replacement of the old long haul workhorses such as the DC-10, MD-11, L-1011 Tristar, B747SP and B747-100/200/300.

 

The 767-200/300 was designed as a direct competitor of the A300/A310. It doesn't make sense to buy 767s now because it is due to be replaced by the 787. One will be buying into ancient technology too if they decided to go for the 767. The A330 makes a sensible choice during the interim and the technological transition period (to B787 and A350). Don't forget that there are potential risks associated with the first batch of the 787, like MH and TG had experienced with the first few batches of A330s, it could potentially be glitchy before they become more fuel efficient and reliable down the track. I also read that both SQ and QF is keen on upgrading their A380s now that the upgrade package is available for earlier A380s.

 

I can see that MH will be operating their new A330-300E down to as far reaching as the East Coast of Australia (in fact they have sent the A330-200 down to BNE in the past) and perhaps to Japan too (FUK, KIX were once served by A330-300 and A330-200).

 

Now that it looks like JAL may not be operating long haul international flights, that could open up some potential ordering slots for other carriers. *hint *hint :)

Edited by S V Choong

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I put my money NH operating the route especially the ones aren't in the NH system BNE, SYD MEX bouneis aeris correct me if wrong. By the way BNE does not need more 330's we need more heavy's like 747 and 777 :rolleyes:

 

I can see that MH will be operating their new A330-300E down to as far reaching as the East Coast of Australia (in fact they have sent the A330-200 down to BNE in the past) and perhaps to Japan too (FUK, KIX were once served by A330-300 and A330-200).

Now that it looks like JAL may not be operating long haul international flights, that could open up some potential ordering slots for other carriers. *hint *hint :)

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