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


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#1 flee

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Posted 10 April 2018 - 03:24 PM

SINGAPORE (Reuters) - Malaysia Airlines has launched a fresh tender process for 20-30 widebody jets that could supersede a deal with Boeing Co (BA.N) agreed during a high-profile U.S. visit by the country’s prime minister last year, a source with knowledge of the matter said.

 

Its non-binding memorandum of understanding with Boeing to buy eight long-range 787 jets, valued at $2.25 billion at list prices, had come as a surprise given that the national carrier already had an all-Airbus SE (AIR.PA) widebody fleet.

 

More:

https://www.reuters....e-idUSKBN1HH0IJ



#2 Mohd Suhaimi Fariz

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Posted 10 April 2018 - 03:31 PM

The A350XWBs are on lease, so MH's free to decide whether to continue with the lease or to get rid of it once the leases end. So it may not be game over for Boeing yet.

 

If they can offer a great deal, then Boeing might just be able to snatch the order from Airbus.


Edited by Mohd Suhaimi Fariz, 10 April 2018 - 03:37 PM.


#3 flee

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Posted 10 April 2018 - 03:48 PM

Well, Boeing/GE has given cut price deals to Hawaiian and American, so maybe MAG also wants to join the party in squeezing better prices from Boeing and to test where Airbus wants to play in terms of pricing.

 

IMHO, I think MAG should stick to one type - so it should be either the A330Neo family, A350 family or Boeing 787 family. There isn't much point in having 6 aircraft subfleets. 20-30 is more economically viable.



#4 jahur

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Posted 10 April 2018 - 03:50 PM

Have a feeling mab would go for the a330neo instead and surplussing a350 from the current 6. This is Airbus chance to push the Lukewarm received a330neo and push the a350 sales after the American pullout. Operationally it saves mab cost on the Commonality.

Just hope that the company has the manpower. Last I heard the company is still short of crew by near 100+ fleetwide and they're already opening up expat programs to quickly fill in vacancy as quickly as possible but progress is still too slow and people are still resigning every month. Sim session queue is also slowing down the addition of new pilots and cadets as current crew have booking for their base check. Another interesting part is a majority of mab pilots still prefer flying boeing probably because they started off from 737s. The progression rate to widebody Airbus is not as easy with quite high sim failure rate than those from AirAsia where the crew are already familiar with Airbus. They'll have to sort Airbus rated pilots in bulk to avoid progression delay as well.

#5 flee

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Posted 10 April 2018 - 04:02 PM

Have a feeling mab would go for the a330neo instead and surplussing a350 from the current 6. This is Airbus chance to push the Lukewarm received a330neo and push the a350 sales after the American pullout. Operationally it saves mab cost on the Commonality.

It won't be so easy to get rid of the A350 as they are on 12 year leases from ALC.

 

As with all aircraft orders, it is the terms of the sale and the finance arrangements that are highly important. Lets see what happens with this new RFI...



#6 wee c k

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Posted 10 April 2018 - 09:47 PM

Have a feeling mab would go for the a330neo instead and surplussing a350 from the current 6. This is Airbus chance to push the Lukewarm received a330neo and push the a350 sales after the American pullout. Operationally it saves mab cost on the Commonality.

Just hope that the company has the manpower. Last I heard the company is still short of crew by near 100+ fleetwide and they're already opening up expat programs to quickly fill in vacancy as quickly as possible but progress is still too slow and people are still resigning every month.


Its official. Short by 300++ pilot by the end of the year.

#7 Eddy Liew

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Posted 10 April 2018 - 10:02 PM

Malaysia Airlines says going ahead with MoU with Boeing

Read more at https://www.thestar....RLvDq59VqGxM.99



#8 Mushrif A

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Posted 10 April 2018 - 10:08 PM

Malaysia Airlines says going ahead with MoU with Boeing
Read more at https://www.thestar....RLvDq59VqGxM.99


The headline is misleading. MH simply said no change to the status quo. Headline suggests, perhaps mischieviously, that MH is converting the MoU into a firm order.

#9 flee

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Posted 11 April 2018 - 08:53 AM

The Reuters article above has been updated to provide more information.

 

Lets see what comes out of the RFI - MAG needs to order the wide bodies soon because the leases for their A333s will begin to expire in about 2-3 years - so they will either have to order new aircraft or extend the leases of the old ones.



#10 jani

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Posted 11 April 2018 - 11:33 AM

The MH statement is merely saying the Reuters article is erroneous, which is totally plausible if they want to be technical about it.

 

I have little doubt that the process has indeed been kicked-off. Capt Izham's visit to CIMB in the past few days also to me adds some weight to this.



#11 KK Lee

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Posted 11 April 2018 - 02:43 PM

The MH statement is merely saying the Reuters article is erroneous, which is totally plausible if they want to be technical about it.
 
I have little doubt that the process has indeed been kicked-off. Capt Izham's visit to CIMB in the past few days also to me adds some weight to this.


Maswings defaulted their lease to local banks previously. Not sure, many are willing to finance new purchase unless arm twisted by mof.

#12 flee

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Posted 11 April 2018 - 11:19 PM

The MH statement is merely saying the Reuters article is erroneous, which is totally plausible if they want to be technical about it.

 

I have little doubt that the process has indeed been kicked-off. Capt Izham's visit to CIMB in the past few days also to me adds some weight to this.

Yes, last year, the talk was all about a 25 widebody aircraft order before the Boeing MoU was signed. And when it was signed, the number of orders fell short - only 8 planes, not 25!

 

I believe that they are merely resuming their shopping for new widebodies and the MoU will either be expanded to include more aircraft or abandoned if another type is chosen.



#13 Mohd Azizul Ramli

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Posted 12 April 2018 - 03:28 AM

It won't be so easy to get rid of the A350 as they are on 12 year leases from ALC.

 

I recalled correctly the 6 A350 are on a 6 years lease. And from past communications, MH is not too keen about it (that it will be returned to lessor as soon as the lease expires).



#14 KK Lee

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Posted 12 April 2018 - 05:27 AM

Not all regional and intercontinental routes could fill or break even a 300 seaters daily. To maximize yield, Mh need to consider different model with capacity range from about 220 to 300.

#15 flee

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Posted 12 April 2018 - 07:43 AM

I recalled correctly the 6 A350 are on a 6 years lease. And from past communications, MH is not too keen about it (that it will be returned to lessor as soon as the lease expires).

They are on long term leases:

https://www.reuters....N11G41N20150910

 

https://www.thestar....o-new-aircraft/

 

I find it strange that they are not too keen on the A350s too. So, if the A380 and A350 are not good aircraft for the MH long haul route to LHR, what other aircraft can they use? The B77W will still be too big and the B77E will be fuel guzzling.


Not all regional and intercontinental routes could fill or break even a 300 seaters daily. To maximize yield, Mh need to consider different model with capacity range from about 220 to 300.

Therein lies the problem MH needs to solve - why can EK do 2 x A380s and 1 x B77W from KUL daily and they cannot even fill a 300 seater flight from their home hub?

 

MH really needs to look at itself closely as to why its sales performance his not improved enough over the years, especially in light of the the fact that the passenger market doubles every ten years.


The CASK for say, the A332, is not going to be better than that for the A333 or A388 due to poorer economies of scale. They recognised that and that was why they have ordered the B737-10 Max. That will allow them to operate a 200 seater at narrow body economics.



#16 Mohd Suhaimi Fariz

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Posted 12 April 2018 - 07:52 AM

Therein lies the problem MH needs to solve - why can EK do 2 x A380s and 1 x B77W from KUL daily and they cannot even fill a 300 seater flight from their home hub?

 

What makes you think EK's 2 x A380s & 1 x B77W are profitable? It could just be that those flights are loss leaders to feed in their DXB-Wherever flights.



#17 leon t

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Posted 12 April 2018 - 10:02 AM

With only 25 widebodies, MAS better stick with A350s which they already have some now and stick to a single type of aircraft to ensure efficiencies in ops, maintenance, spares and crewing.  On Emirates flying A380s and 777 to KUL, it should be making some money and at least breakeven as doubt Emirates would want to "lose" money and use KUL to feed its DXB flights.



#18 Mohd Suhaimi Fariz

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Posted 12 April 2018 - 10:08 AM

With only 25 widebodies, MAS better stick with A350s which they already have some now and stick to a single type of aircraft to ensure efficiencies in ops, maintenance, spares and crewing.  On Emirates flying A380s and 777 to KUL, it should be making some money and at least breakeven as doubt Emirates would want to "lose" money and use KUL to feed its DXB flights.

 

If they're going to replace the A350s in due time anyway, they're free to decide otherwise.



#19 Chris Tan

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Posted 12 April 2018 - 10:31 AM

Therein lies the problem MH needs to solve - why can EK do 2 x A380s and 1 x B77W from KUL daily and they cannot even fill a 300 seater flight from their home hub?

Because MH's "home hub" doesn't connect the world, unlike DXB. It has neither the O&D nor connecting traffic to support an EK-style megafleet. Unless, of course, Malaysian taxpayers are willing to shell out another 10 billion ringgit to keep bailing out the airline.

MH really needs to look at itself closely as to why its sales performance his not improved enough over the years, especially in light of the the fact that the passenger market doubles every ten years.

The CASK for say, the A332, is not going to be better than that for the A333 or A388 due to poorer economies of scale. They recognised that and that was why they have ordered the B737-10 Max. That will allow them to operate a 200 seater at narrow body economics.

I'm sure those with actual knowledge of CASK would be able to make the right decision.

#20 jani

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Posted 12 April 2018 - 11:08 AM

Maswings defaulted their lease to local banks previously. Not sure, many are willing to finance new purchase unless arm twisted by mof.

 

Considering MASWings is not really a commercial entity, whatever loan they took up must've been guaranteed by the government anyway.

 

Even if that is not the case, whatever financial undertaking MH takes up now will again surely be backed up by Khazanah....

 

Really a non-issue.






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