Malaysian Air Said to Weigh 100-Plane Order to Upgrade Fleet

[alberttky 0]

Malaysian Airline System Bhd. (MAS) plans to order as many as 100 planes, a person familiar with the matter said, as the carrier seeks to upgrade its fleet over the next decade and fend off competition from budget operators.

The state-run carrier is looking at a range of short-haul and long-haul models from both Airbus Group NV (AIR) and Boeing Co. (BA), said the person, who asked not to be identified because the information is private. A decision on the purchase may be taken by the end of first half of this year, the person said.

Malaysian Air is seeking to start taking deliveries of the aircraft from late 2016 or early 2017, the person said. The carrier is working to upgrade its fleet with new, fuel-efficient planes as fuel costs and competition from discount airlines such as AirAsia Bhd. pushed it into three straight annual losses.

Najmuddin Abdullah, a spokesman for Malaysian Air, couldn’t be immediately reached on his mobile phone, and didn’t respond to an e-mail seeking comments.

Shares of Malaysian Air were unchanged at 31 sen in Kuala Lumpur trading today. They lost 7 percent last year.

Close to half the world’s air traffic growth will involve Asian routes over the next 20 years, Boeing marketing chief Randy Tinseth has said, with carriers from the region acquiring 12,820 more aircraft, or 36 percent of the global total. Competitor Airbus puts the figure at 11,000 planes.

http://www.bloomberg.com/news/2014-02-18/malaysian-air-said-to-weigh-100-plane-order-to-upgrade-fleet.html

[suadrif 0]

blaming the fuel effeciency and airasia...again.

[BC Tam 2]

Credit where credit is due, perhaps they are at last planning for the future instead of fire fights on ad-hoc basis

[Johan Z 0]

I believe it when they actually do it.

[nrazmoor 0]

Hmm.. interesting deliveries start from 2016, kind of coincidence with Amedeo first delivery of A380.

[KC Sim 2]

This is indeed a good move. For the first time in a long time, it appears to be a more coherent fleet re-equipment programme rather than a piece-meal one.

 

I doubt Armedeo's acceptance of the A380 in 2016 is of any significance as the A380 appears to be much to much capacity for MAS to profitably operate year-round. It sure could fill the planes most of the time but the yield it gets now just do not support the acquisition of more A380s. Something matching the capacity and capability of the B777-300ER would be far more useful.

 

Such a deliberation if it is completed by the first half of this year would make one hell of an order announcement at the Farnborough Air Show 2014.

 

KC Sim

[KK Lee 5]

Hmm.. interesting deliveries start from 2016, kind of coincidence with Amedeo first delivery of A380.

Coincide with GE14?

[flee 5]

I believe it when they actually do it.

Tend to agree with you. The past year saw many "decisions" on long haul wide body order postponed many times.

 

Having said that, they may now be looking at aircraft procurement in a holistic manner - so they are thinking about replacing narrow bodies too rather than be caught with their pants down with ageing, fuel inefficient aircraft (hanging on the the old B734 for so long hurt a lot).

 

With the new A320neo and B737max offering double digit % fuel savings, it is important that MH taps into these next generation engine technologies as soon as possible. They can return the leased aircraft first, then lease the new tech aircraft to replace those old ones.

 

Lets see if any announcement is made at Farnborough...

Edited February 19, 2014 by flee

[Suzanne Goh 0]

Pay with what? sea shells? goats? Who pays?

 

oh wait... I forgot.....

 

[/looks in mirror]

[Isaac 0]

Pay with what? sea shells? goats? Who pays?

 

oh wait... I forgot.....

 

[/looks in mirror]

[Johan Z 0]

Tend to agree with you. The past year saw many "decisions" on long haul wide body order postponed many times.

 

Having said that, they may now be looking at aircraft procurement in a holistic manner - so they are thinking about replacing narrow bodies too rather than be caught with their pants down with ageing, fuel inefficient aircraft (hanging on the the old B734 for so long hurt a lot).

 

With the new A320neo and B737max offering double digit % fuel savings, it is important that MH taps into these next generation engine technologies as soon as possible. They can return the leased aircraft first, then lease the new tech aircraft to replace those old ones.

 

Lets see if any announcement is made at Farnborough...

 

That's in July. They missed a lot of air shows to announce the order(s). Just do it already.

[S V Choong 4]

Pay with what? sea shells? goats? Who pays?

 

oh wait... I forgot.....

 

[/looks in mirror]

Or follow what Thai Airways did... Pay with shrimps and lobsters . Or satays

 

What is the incentive of ordering during airshow days compared to ordinary days? What sort if savings are we talking about?

Edited February 19, 2014 by S V Choong

[JuliusWong 0]

Or follow what Thai Airways did... Pay with shrimps and lobsters . Or satays

 

What is the incentive of ordering during airshow days compared to ordinary days? What sort if savings are we talking about?

The incentive of placing order during airshow is that industry players will perceive you (the buyer) is someone is ommph! (with power) and gets lots of attention......er..er...in MH's case, I don't know if this is true.

[Amirul Mazlan 0]

We bought Polish tanks by trading palm oil. Sure the same deal can be worked out with MAS this time.

[alberttky 0]

Malaysia Airlines plans aircraft orders as part of turnaround plan

Loss-making Malaysia Airlines is waiting for government approval to place a multi-billion dollar order for up to 100 Airbus and Boeing passenger aircraft, two people familiar with the negotiations told Reuters, a move aimed at boosting its profitability.

The new aircraft will lower the airline's operating costs by allowing it to retire its older, less fuel-efficient aircraft. That may help it cope with intense competition at home and within Southeast Asia, the people said.

Malaysia Airlines (MAS) has 88 aircraft in its fleet, including Airbus A330s and A380s, and Boeing 777-200s and 737s, according to its website.

It plans to initially order around 30 widebody aircraft, including Airbus A330s and A350-900s, to replace its older Airbus A330s and Boeing 777-200s over this decade. It could also order either the Boeing 787-10 or the Airbus A350-1000 for its fleet beyond 2020, one of the people said.

 

MAS is keen to begin taking delivery of some aircraft from 2016, which means that it could meet part of it requirements from leasing companies, the sources said.

 

While the airline considered adding one or two more A380s to the six in its fleet, it has decided that twin-engined widebody aircraft are its priority.

 

MAS, which operates Boeing 737-800s for its short haul and regional services, is also looking at an order for the 737 Max to replace the older planes in its fleet.

 

A Malaysia Airlines spokesman was not immediately available for comment and the people familiar with the order declined to be named as the details were confidential.

 

The airline believes the fuel efficiency and lower maintenance requirements of the new aircraft will help it cut costs. It will also be able to fly more passengers and reach new destinations with the planes, potentially raising revenues.

 

Yesterday, the airline reported a net loss of RM343.4 million ($104.23 million) in the October-December 2013 period, its fourth consecutive quarterly loss. Its full year losses were nearly three times higher than in 2012 at RM1.17 billion.

 

"Malaysia Airlines expects the business environment to remain challenging with high fuel prices, volatile foreign exchange and intense competition impacting yield from both existing as well as new entrants into the market," the airline said in a statement.

 

"The significant increase in capacity, especially the continued expansion of Middle Eastern and European carriers into our region, is adding further competition to the already crowded marketplace."

 

The airline faces stiff competition at home from low-cost carrier AirAsia on the short-haul and domestic segments, and from AirAsia X in the medium and long-haul market.

 

The entry last year of Malindo, a full-service airline that is partly owned by Indonesia's Lion Air, sent yields sharply lower in 2013 as both MAS and AirAsia slashed fares to keep their market share.

 

MAS is also trying to keep up with other Southeast Asian full-service carriers in the highly competitive medium and long-haul markets, while Gulf carriers like Emirates, Etihad and Qatar Airways are also eating into its market on services to Europe and Australia.

 

Regional rivals like Singapore Airlines and Thai Airways have also ordered new generation widebody aircraft such as the A350 and 787. Garuda Indonesia is set to also choose between those two aircraft – or possibly pick both – for its fleet. – Reuters, February 19, 2014.

http://www.themalaysianinsider.com/business/article/malaysia-airlines-plans-aircraft-orders-as-part-of-turnaround-plan

[DaTan 0]

100 of what aircraft????

 

up till now MH has not even said what planes they are getting.

 

RC planes?

 

100 A350?

[alberttky 0]

I'm glad I'm not paying taxes in Malaysia.

[flee 5]

Soon you will - GST coming....

[S V Choong 4]

Soon you will - GST coming....

 

Meh, that is only a very tiny amount as a tourist for a week or two...

 

I'm glad I'm not paying taxes in Malaysia.

 

Ditto...

 

MAS is taking a very similar approach as the US govt... keep raising their debt ceiling!

Edited February 19, 2014 by S V Choong

[Ja Singh 2]

Malaysia Airlines plans aircraft orders as part of turnaround plan.................................

 

plan and plan and then more planning and then plans then more planning then wait,more plans.

 

NATO..........

 

hopefully they will sell the T7's and lease some brand new 777W/787/A332........

like now!by selling off the T7's they can release some cash for the leasing perhaps?

 

so did we fail to plan or plan to fail?

Edited February 19, 2014 by jadivindra

[Josh T 0]

I hope this is true. It's time MH stopped playing catch-up and start thinking ahead. AND hopefully, get market-leading hardware for the new planes llike good seats for their premium cabins!!

[Ashraf 0]

I think this is someone's idea of making a fast buck

[leon t 0]

MH dont need to order 100 newplanes as yet - as they have now accumulated another debt ofalmost another rm1.2Billion. MH already have its 738s and its new A330Es - and whats more pressing is its 14 772s. What they need in the interim is to get the new either 779s or A350s and another 6 or 10 of the new A330Es. There have been talks even or getting 2 new A380s which is unnecessary for some time to come. Actually MH always been saying the new planes will save fuel and help turn the company around - but really? We can see that the older 772s are still used by SQ and BA and alot of other airlines and they are still profitable for them. Instead as MH have been losing billions yearly, the older aircrafts like the 772s can still be ok and better as its leases are very much cheaper than new planes as they should be entire fully depreciated or almost depreciated. In fact new start ups even LCCs always lease older planes as their costs are very much lower. Hence the excuse for MH for new planes to reduce costs is not seriously a valid one. Whilst a new 779 can reduce it fuel by 15% to20% against the older 772 but the leasing costs is also so much different. But then of course for MH its a different ball game as the govt through PNB buys the plane and can lease them to MH at even cheap leases.

[leon t 0]

eve if MH replaces its 738s and 772s with new n latest planes, the average fule savings of 15% fom exisitng fleet will also by simple calculation will not negate the rm1.17Billion losses - what it means for MH now is more to reduce its losses than even talk about making profits. Without tackling the core and root problem of MH loss making, buying new planes etc will not help MH make any profit. The root cause of the cancer that is afflicting MH must be checked first.

But even the talk about buying even 2 more A380s is worrying in itself as many have opinioned that MH do not even need the A380s in the very first place.

[Johan Z 0]

eve if MH replaces its 738s and 772s with new n latest planes, the average fule savings of 15% fom exisitng fleet will also by simple calculation will not negate the rm1.17Billion losses - what it means for MH now is more to reduce its losses than even talk about making profits. Without tackling the core and root problem of MH loss making, buying new planes etc will not help MH make any profit. The root cause of the cancer that is afflicting MH must be checked first.

But even the talk about buying even 2 more A380s is worrying in itself as many have opinioned that MH do not even need the A380s in the very first place.

 

It's just an excuse from MH to justify their losses. They will never admit MH has been mismanaged for a long time.