Malaysia Airlines orders Boeing 737 MAX jets, eyes March 2019 listing

PUTRAJAYA: Malaysia Airlines Bhd (MAB), which plans to buy up to 50 Boeing 737 MAX aircraft worth US$5.5 billion (RM22.4 billion), is eyeing a listing on Bursa Malaysia in March 2019.
The company was delisted from the stock exchange on Dec 31, 2014 following a privatisation exercise by Khazanah Nasional Bhd to restructure the airline after it was hit by two tragedies – the disappearance of flight MH370 and the shooting down of flight MH17.
MAB CEO Peter Bellew said the airline's turnaround is on track and the business plan remains the same, with an acceleration in the sales and marketing campaign over the next six months.
"The Olympics for us is to try get a listing in place, depending on where the overall international capital markets go. If you work back five quarters, we would be profitable through 2018 so we have lots of work to do to make sure Malaysia Airlines gets back on track," he told a press conference after a signing ceremony between Malaysia Airlines and Boeing here yesterday.
MAB's purchase of new Boeing 737 MAX aircraft consists of 25 firm orders and 25 purchase rights. Deliveries will begin in 2019 and the national carrier will take delivery of a mix of 737 MAX 9 and 737 MAX 8.
Bellew said the deal is a game changer for Malaysia Airlines with much lower costs and greater efficiency, benefits which will be passed on to customers in the form of lower fares.
The new Boeing 737 MAX will significantly lower MAB's operating costs, including 12% more seats than its existing fleet, 15% lower fuel consumption and up to 40% lower costs per month on aircraft operations.
"Overall, it just makes far more business sense for us and it's a much better product for the customers. And in every aspect it doesn't add on significant costs," he added.
The purchase will be financed with a combination of sale and leaseback of existing aircraft, as well as internal funds and loans.
"We don't see any issue of getting the funding. The Boeing 737 MAX aircraft is one of the most bankable assets," said Bellew.
He said the new order will cater to growth markets in North Asia, China, India and Pakistan over the next five to 10 years. China is Malaysia Airlines's fastest growing market with one of the highest seat load factors.
MAB has a fleet of 15 A330s, 56 737s and six A380s. The A380s
will be in service until mid-2018.
On whether it plans to buy more aircraft, Bellew said the airline is continuing to study the market. "What could become increasingly affordable over the next 12 months would be a second-hand, wide-body aircraft."
Meanwhile, on another issue, Bellew said he hopes the Malaysian Aviation Commission will equalise the passenger service charges between KLIA and klia2 so that it can have a level playing pitch.
Currently, there is a difference of US$8.25 (RM33) between the two terminals.
"If the charges don't get changed, and there still continues to be a US$8.25 advantage from operating from klia2, we would have to operate some of our flights from klia2," said Bellew.