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Malaysia Airlines launches widebody tender process, could oust Boeing 787 deal: source

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Yes, they are empowered to terminate leases under the Malaysia Airlines Act. This was necessary during the restructuring.

Terminate lease with who?

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Terminate lease with who?

The Act (see http://www.federalgazette.agc.gov.my/outputaktap/20150105_AKTA%20765_BI_MAS%20(Administration)%202015_1.pdf) gave the administrator great powers and even exempt it from laws like the Companies Act!

 

It was used to terminate contracts of all sorts and the B777s, B738s and ATR-72s were amongst the leases that were terminated.

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The Act (see http://www.federalgazette.agc.gov.my/outputaktap/20150105_AKTA%20765_BI_MAS%20(Administration)%202015_1.pdf) gave the administrator great powers and even exempt it from laws like the Companies Act!

 

It was used to terminate contracts of all sorts and the B777s, B738s and ATR-72s were amongst the leases that were terminated.

Not only immune from termination of contract but also default in lease payment.

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The Act (see http://www.federalgazette.agc.gov.my/outputaktap/20150105_AKTA%20765_BI_MAS%20(Administration)%202015_1.pdf) gave the administrator great powers and even exempt it from laws like the Companies Act!

 

It was used to terminate contracts of all sorts and the B777s, B738s and ATR-72s were amongst the leases that were terminated.

yes MAB have all the rights o terminate leasing agreements etc - and thats how despite many "turnarounds" and restructurings that MAB is still losing money and unprofitable. Now seems MAB is looking at other widebodies other than the 6 A350s that they are operating. Withe such a sall fleet even with up to 25 aircrafts, it should remain a one type widebody to get the economies of scale in fleet maintenance, aircraft parts/spares and tech n cabin crew commonality,that is so important towards costs, and that only a proper fleet planning can reduce its operating costs. One can easiely see how SQ or CX deliberately "misusing" some of its long range widebodies even on regional sectors.

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yes MAB have all the rights o terminate leasing agreements etc - and thats how despite many "turnarounds" and restructurings that MAB is still losing money and unprofitable. Now seems MAB is looking at other widebodies other than the 6 A350s that they are operating. Withe such a sall fleet even with up to 25 aircrafts, it should remain a one type widebody to get the economies of scale in fleet maintenance, aircraft parts/spares and tech n cabin crew commonality,that is so important towards costs, and that only a proper fleet planning can reduce its operating costs. One can easiely see how SQ or CX deliberately "misusing" some of its long range widebodies even on regional sectors.

SQ/CX etc Regional op with using multiple types of widebodies is not misusing. It's flexibility. You're down by 30 pax you have the equiptment u save quite a lot. You have suddenly upfront 50 paying pax on standby upgauging solves this and you yield more as those fares are ceiling levels. If you expect an airline to wait for the holidays to fill up the wallets it's unfortunately going to be a barely break even on annual performance. The airlines have to learn how to deploy and always swap the correct equiptment on seasonal basis.

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The Act (see http://www.federalgazette.agc.gov.my/outputaktap/20150105_AKTA%20765_BI_MAS%20(Administration)%202015_1.pdf) gave the administrator great powers and even exempt it from laws like the Companies Act!

 

It was used to terminate contracts of all sorts and the B777s, B738s and ATR-72s were amongst the leases that were terminated.

 

 

Not only immune from termination of contract but also default in lease payment.

 

Can MH use the Act to terminate its 350 lease or default in lease payment with ALC should the need arises? I have a feeling ALC is going to ask MAB to pound sand.

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Can MH use the Act to terminate its 350 lease or default in lease payment with ALC should the need arises? I have a feeling ALC is going to ask MAB to pound sand.

 

It's no different than when an American airline declares Chapter 11 bankruptcy protectioin actually.

 

But in this case, the Act won't apply because the act is only applicable to MAS. ALC signed an agreement with MAB. But I doubt the agreement doesn't include the usual escape clauses.

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They should go for a B788/9/10 combo that way they have one fleet type with varied capabilities. Since narowbody is gna be MAX down the road, transition wise going up would be easier.

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MAS could transition to an all Boieng fleet, when phasing out the A330, rid the A350 when the lease ends?

 

737, maybe some 797, 787 and 777x?

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Maybe MAB will convert all the Max orders to B787s and order Airbus A320/321 Neos with Pratt engines.

 

I think MAB does not favour GE at all and relations with RR is not as good as those that they have with Pratt. So, if there is going to be a change in fleet policy, MAB might as well revamp the whole fleet.


I doubt MAB needs the 777x at all. Too big and the 787 already has the range. The 777x is more suitable for the ME3 airlines - not many airlines need it.

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Maybe MAB will convert all the Max orders to B787s and order Airbus A320/321 Neos with Pratt engines.

 

I think MAB does not favour GE at all and relations with RR is not as good as those that they have with Pratt. So, if there is going to be a change in fleet policy, MAB might as well revamp the whole fleet.

 

I doubt MAB needs the 777x at all. Too big and the 787 already has the range. The 777x is more suitable for the ME3 airlines - not many airlines need it.

The % reliability rate of the Pw1000g for the a320-a321neo family are one of the worse out there. Imagine that the plane had to stand idle after pushback for a few minutes before commencing any taxing sequence. Then the landing you can't shut down the engine until at least 2minutes of idle time. There also many software problems with the engines where many bugfix patch has been applied and yet new bugs pop out. Another is the PW1000G has poor hardware endurance when operating in major hot tropical countries. It was damn lucky that majority of the a320neo operators are using the cfm leap instead. The 737max cfm only had few software issues which could be patched or operational restriction applied.

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The % reliability rate of the Pw1000g for the a320-a321neo family are one of the worse out there. Imagine that the plane had to stand idle after pushback for a few minutes before commencing any taxing sequence. Then the landing you can't shut down the engine until at least 2minutes of idle time.

That problem has been solved. Currently, the problem that need to be fixed are the durability of seals for various bits of the turbine. Pratt has resolved to have it done by Q1 and resume deliveries in Q2. Any order from MAB won't be delivered until around 2020. So the problems would have been sorted out.

 

Look at how hard MAB worked to source their A332 with Pratt engines - they have some investment in that. I don't think MAB will throw away Pratt engines anytime soon. So if the A330s with Pratt engines leave the fleet, new incoming aircraft must have Pratt engines too!

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I doubt MAB needs the 777x at all. Too big and the 787 already has the range. The 777x is more suitable for the ME3 airlines - not many airlines need it.

The problem mab has is capacity issue on certain trunk routes like LHR. They need a 330-350 seater plane. Believe mix mode deployment of a350-1000 and a350-900 is needed. The a380 was just too big even filling it near full barely broke even. B787-10 while capacity wise is near there I doubt mab is going to waste money on it. What it needs now is the a330 replacement that somewhat complements it as well and the only aircraft that has that is the b787-9 or a330-900neo. In someway Mab needs a350-900 and a350-1000 and either the b787-9 or a330-900 for it's widebody fleet. But somewhat choosing the b787-9 will reduce the backlog issue of crew progression.

 

In the old days pilot rate progression was okay as 734 will progress as an officer 772 then to 744 before coming down to command the a333. Nowadays the progression rate is sluggish with many high failure rate as Boeing to Airbus conversion is not easy for young pilots and there is no Boeing widebody for them to adapt first. Mab has to sort out Airbus widebody rated crew if their own crew can't pass.

 

Look at how hard MAB worked to source their A332 with Pratt engines - they have some investment in that. I don't think MAB will throw away Pratt engines anytime soon. So if the A330s with Pratt engines leave the fleet, new incoming aircraft must have Pratt engines too!

The pw4168 were reliable for the past two decades. Even the initial introduction of that engine had little hiccups. Thats why mas went for it. The pw1000g has too much issues the only way mab wil get it is observe other users testing the engines that were delivered post 2020 and retrieving operating data. By the time mab wants to commit to such an order they'll already be using 737max and there's no point to order the neo. Edited by jahur

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The a380 was just too big even filling it near full barely broke even. B787-10 while capacity wise is near there I doubt mab is going to waste money on it. What it needs now is the a330 replacement that somewhat complements it as well and the only aircraft that has that is the b787-9 or a330-900neo. In someway Mab needs a350-900 and a350-1000 and either the b787-9 or a330-900 for it's widebody fleet.

Yes, MAB really needs to decide if it wants to go with the A350-900 for the full 12 year lease term or not. It is the replacement for the B777-200ER, both in capacity and also range.

 

The B787-9 and A330-900 are good replacements for the A330-300. MAB uses the A330-300 for medium range routes - so, it does not need the super long range of the B787-9 and the 242t A330-900 would appear to be the better bet in terms of acquisition costs. Maintenance should also be easy as they already have A330 capability.

 

As for the A380 - it is currently deployed on its sweet spot routes of around 7-8 hours (ICN, NRT, SYD) as a super sub. Maybe it will be used as a supersub for some time as the charter operation only needs four aircraft on startup. MAB might just hang on to the remaining two for use as super subs. If MAB has these super subs, it won't need the A350-1000....

In the old days pilot rate progression was okay as 734 will progress as an officer 772 then to 744 before coming down to command the a333. Nowadays the progression rate is sluggish with many high failure rate as Boeing to Airbus conversion is not easy for young pilots and there is no Boeing widebody for them to adapt first. Mab has to sort out Airbus widebody rated crew if their own crew can't pass.

The pw4168 were reliable for the past two decades. Even the initial introduction of that engine had little hiccups. Thats why mas went for it. The pw1000g has too much issues the only way mab wil get it is observe other users testing the engines that were delivered post 2020 and retrieving operating data. By the time mab wants to commit to such an order they'll already be using 737max and there's no point to order the neo.

This is a more difficult problem to solve. I guess it can only be solved if their HR comes up with some training and recruitment programme that will create different pools of pilots for Boeing and Airbus aircraft, seeing as they have problems transitioning Boeing crews to Airbus.

 

If MAB is prepared to junk the A350 programme, there should also be no problems in junking the 737 Max programme too. They are both leasing agreements and can be terminated easily, provided the termination penalties are paid.

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Yes, MAB really needs to decide if it wants to go with the A350-900 for the full 12 year lease term or not. It is the replacement for the B777-200ER, both in capacity and also range.

 

The B787-9 and A330-900 are good replacements for the A330-300. MAB uses the A330-300 for medium range routes - so, it does not need the super long range of the B787-9 and the 242t A330-900 would appear to be the better bet in terms of acquisition costs. Maintenance should also be easy as they already have A330 capability.

 

As for the A380 - it is currently deployed on its sweet spot routes of around 7-8 hours (ICN, NRT, SYD) as a super sub. Maybe it will be used as a supersub for some time as the charter operation only needs four aircraft on startup. MAB might just hang on to the remaining two for use as super subs. If MAB has these super subs, it won't need the A350-1000....

 

This is a more difficult problem to solve. I guess it can only be solved if their HR comes up with some training and recruitment programme that will create different pools of pilots for Boeing and Airbus aircraft, seeing as they have problems transitioning Boeing crews to Airbus.

 

If MAB is prepared to junk the A350 programme, there should also be no problems in junking the 737 Max programme too. They are both leasing agreements and can be terminated easily, provided the termination penalties are paid.

They can drop the planes when lease ends but I'll be a headache for the operation and the crew. This is one of the reason AirAsia was reluctant to get the b777 or b787s. Mass recruitment and expat programs intake required while the old crew undergoes 6-9 months of chamber boiling pot training with no guarantees and simulators constraint the fleet transition could take more than 3years it would need pockets to do so which neither any Malaysian carriers can afford.

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So there we go, all this talk about D7 and MH getting B787s is more posturing and political theatre. In reality, implementing a fleet type change is a hugely difficult thing to manage.

 

For MAB, introducing the A359 was easier as A330/A380 crew can be converted with relative ease. But converting from A330/A380 to B789 may not be so easy!

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Training is but a small part of the whole equation.

 

Acquisition costs matters to be honest, so if Boeing can really hammer out incredible pricing on the 787s, I'd think any airline would take the plunge and switch. Just look at Silkair - they ditched Boeing for Airbus, and then they're back flying Boeings again.

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So there we go, all this talk about D7 and MH getting B787s is more posturing and political theatre. In reality, implementing a fleet type change is a hugely difficult thing to manage.

 

For MAB, introducing the A359 was easier as A330/A380 crew can be converted with relative ease. But converting from A330/A380 to B789 may not be so easy!

I believe why the 787-9 was considered an option was because the constraint faced by the company with the ommision of the b772. Very low passing rate from the 738 if they were sent to the a333 some even opt to come back to 737 halfway through. Even the current A333 crew majority of them came from the 772 or 744 with few exception of very good 734 pilots. Bassically it requires a lot of hours which takes years for Boeing to Airbus or vice versa but airlines nowadays just want you to progress in just two years time as they want to hire more pilots in Mass for the narrowbodies. That's why big gulf carriers do mass recruiting overseas for Boeing/Airbus rated pilots their own self progression from 777 to a380 also have very low rate of passing. So with people leaving mab on a monthly basis if mab ordered the a330neo they won't be able to efficiently source pilots from the Boeing narrowbody fleet especially when the a330 crew goes for progression or resigns.

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Just look at Silkair - they ditched Boeing for Airbus, and then they're back flying Boeings again.

I think for Silkair, switching back to 737 was due to the fact that it had earlier delivery slots.

I believe why the 787-9 was considered an option was because the constraint faced by the company with the ommision of the b772. Very low passing rate from the 738 if they were sent to the a333 some even opt to come back to 737 halfway through.

Was the pass rate any better, going from B734 to B772? I wonder what will be the pass rate if they came from B738 to B789... should be interesting to note.

Training is but a small part of the whole equation.

I believe it is a big headache, as jahur has eluded. In order for machinery to work well, all parts must work well and no part should be defective.

 

There is not much point having planes sitting in the hangar/apron, waiting for crew to be available. Even if you got the planes for free, they are costing the company money because they are not productive!

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I think for Silkair, switching back to 737 was due to the fact that it had earlier delivery slots.

 

Was the pass rate any better, going from B734 to B772? I wonder what will be the pass rate if they came from B738 to B789... should be interesting to note.

 

I believe it is a big headache, as jahur has eluded. In order for machinery to work well, all parts must work well and no part should be defective.

 

There is not much point having planes sitting in the hangar/apron, waiting for crew to be available. Even if you got the planes for free, they are costing the company money because they are not productive!

In rough estimate The 737 to 777 out of 20+ that went only 2 went for recurrent due to line check not cleared and not performing. The 737 to a330 20+ went about 15 of them took longer to clear line training some were thrown back to sim some gave up and applied back for 737 even worse was some got grounded. The funny fact was batches from 772 or 744 went to the a333 majority of them managed to pass. Also 737 pilots with instructor rating could go to the a330 and pass with no issue but they would have to give up their instructor rating which for them might be a paycut. Another note is majority of mab pilots prefer Boeing this is no joke it could also probably be due to the fact that most of them started from Boeing narrowbody fleet. If it was Airbus it might have a different reception. Edited by jahur

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In rough estimate The 737 to 777 out of 20+ that went only 2 went for recurrent due to line check not cleared and not performing. The 737 to a330 20+ went about 15 of them took longer to clear line training some were thrown back to sim some gave up and applied back for 737 even worse was some got grounded. The funny fact was batches from 772 or 744 went to the a333 majority of them managed to pass. Also 737 pilots with instructor rating could go to the a330 and pass with no issue but they would have to give up their instructor rating which for them might be a paycut. Another note is majority of mab pilots prefer Boeing this is no joke it could also probably be due to the fact that most of them started from Boeing narrowbody fleet. If it was Airbus it might have a different reception.

The recurrent rate from 737 to a330 is industrial average, higher or lower?

Edited by KK Lee

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The recurrent rate from 737 to a330 is industrial average, higher or lower?

Quite high compared as to say a320 to a330 or even a320 to a350. Which is why LCC's tend to go for Commonality to avoid lag. Boeing pilots especially those who are only typerated for just the 737 find it hard to adapt to Airbus law. Automation itself is taught on the b777 but more compatible for 737 pilots so once they could get some good hours and few years in the b777 they can easily come down to the a330 or even take captain position provided he has the hours. It all comes down to experience on the right aircraft. The 787 has more classes relating automation etc than the 777 but as usual Boeing law and procedures it's easier for narrowbody boeing pilots to adapt.

 

The potential problem for mab now with pilots resigning is 737 fo's might not be able to cover the a330 or a350 when the widebody crew resigns etc. It has happen before. The only way is to hire Airbus rated pilots from other airlines or redo the policy where fresh cadets will start directly on the a330. MAB decision to get the 787 also partly attributes to the potential reduction of progression delay and stagnation.

Edited by jahur

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Quite high compared as to say a320 to a330 or even a320 to a350. Which is why LCC's tend to go for Commonality to avoid lag. Boeing pilots especially those who are only typerated for just the 737 find it hard to adapt to Airbus law. Automation itself is taught on the b777 but more compatible for 737 pilots so once they could get some good hours and few years in the b777 they can easily come down to the a330 or even take captain position provided he has the hours. It all comes down to experience on the right aircraft. The 787 has more classes relating automation etc than the 777 but as usual Boeing law and procedures it's easier for narrowbody boeing pilots to adapt.

 

The potential problem for mab now with pilots resigning is 737 fo's might not be able to cover the a330 or a350 when the widebody crew resigns etc. It has happen before. The only way is to hire Airbus rated pilots from other airlines or redo the policy where fresh cadets will start directly on the a330. MAB decision to get the 787 also partly attributes to the potential reduction of progression delay and stagnation.

 

So basically there's a stronger justification for MAS to ditch Airbus & go all-Boeing then?

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So basically there's a stronger justification for MAS to ditch Airbus & go all-Boeing then?

Believe MAB needs to firm on their decision. If they're going to order the 330neo please have contingency plan for the crew. Now with manpower cut most the staffs are in somesort of limbo with no clear direction which is why people are leaving for the greener pasture. If this issue continues MAB is going to have to cut down flights but the CEO statement seems go flair like the company is going on Asian expansion with crazy roster and min rest at the expense of the staffs and crew. I don't think I can comment any further or I might get into trouble though but this is just what's sort of happening in mab in the operation aspect. Edited by jahur

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