PMB sells 3 747-400s to new charter airline

KUALA LUMPUR (Jan 17, 2012): Penerbangan Malaysia Bhd (PMB), the parent company of Malaysia Airlines (MAS), has sold three Boeing 747-400s to newly incorporated Eaglexpress Air Charter Sdn Bhd for some US$60 million (RM188.82 million).

PMB, which was set up in 2002 following the Widespread Asset Unbundling restructuring of MAS, is also looking to sell its Airbus A330-322 and has invited bids for the aircraft. Submissions close tomorrow.

Eaglexpress president and CEO Captain Azlan Zainal Abidin said the new charter airline is in discussions with PMB to buy more second-hand Boeing aircraft, including the 747-400s currently used by the national carrier.

"MAS is phasing out the 747-400s, so gradually they (PMB) will make it known to us what is available. I'm not sure the number of aircraft (747-400s) MAS has got (in its fleet) now, but I think it is nine," said Azlan.

"These aircraft will be available to us but not only to us, because PMB will auction them off. Hopefully, with us being a Malaysian company, they will give us preference to bid for those aircraft," he added.

Azlan was speaking to reporters after signing the sale and purchase agreement with PMB for the three 747-400s and the launch of Eaglexpress here yesterday.

The new airline is also looking to buy used 747-400 freighters (747-400Fs) and 737-400s/800s from other aircraft leasing companies such as GE Capital Aviation Services and banks.

"Our options are worldwide. We have other aircraft available to us in the US and Europe, which we will decide later on," said Azlan.

Eaglexpress is 40% owned by its COO and CFO Captain Shin Man Soo from South Korea, while Azlan, former home ministry secretary-general and its executive chairman Tan Sri Dr Aseh Che Mat and executive vice-chairman Datuk Wan Ismail Abdul Rahman hold 20% each.

The new charter airline has been granted an air service permit (ASP) by the Transport Ministry to operate passenger and cargo flight services, and is in the process of getting the air operator certificate (AOC) from the Department of Civil Aviation Malaysia.

Eaglexpress, which will be the country's second charter airline after Berjaya Air Sdn Bhd, will start operations out of KL International Airport in Sepang on Feb 20, when it takes delivery of the first of three new aircraft.

"Our first flight will be a holiday charter to either Australia or South Africa. We have received commitment from a Singaporean travel company and expects to conclude negotiations on the location this week," said Azlan.

Eaglexpress will lease its aircraft to any airline, operator or agent for hajj and umrah, cargo as well as holiday and business charters on a per block hour basis. It will begin its umrah charter flights at end-February or early March.

It will invest almost US$300 million in eight aircraft in its first year of operations, comprising the three newly-acquired 747-400s, three 747-400Fs and two 737-400s/800s, and aims expand its fleet to 20 aircraft in three to five years.

Aiming to break even in two years, it expects to post a revenue of over US$100 million in its first year of operations and over US$200 million in the second year.

Asked whether it will offer scheduled flight services going forward, Azlan said: "It will depend on the board of directors' direction. At the moment, we are more keen on charter service, but if there is requirement from the government to provide the (scheduled flight) services, we will definitely look at that."