Malaysia Aviation Group (MAG) is exploring the possibility of accelerating its Boeing aircraft acquisition timeline, following delivery slots potentially vacated by Chinese carriers due to the ongoing US-China trade war, as reported by Malaysian news agency, Bernama.
MAG’s Group managing director Datuk Captain Izham Ismail said the group views the situation as a potential window to secure earlier-than-expected aircraft deliveries from Boeing, although competition among global carriers for available slots remains intense.
Malaysia Airlines is a part of MAG, which also owns two subsidiary airlines: low cost carrier Firefy and MASwings that covers Sabah and Sarawak in East Malaysia.
“MAG is in conversation with Boeing about whether we can take over those slots. So, we will meet our number faster (fleet). Everybody wants it, 10,000 people want this aircraft. It is a competitive space and we are mindful of what we are getting into,” he said.
China halts Boeing deliveries
Following steep U.S. import taxes on Chinese goods, the Chinese government has instructed its domestic carriers to halt all purchases of Boeing aircraft.
Bloomberg News revealed that Chinese airlines have also been directed to suspend the acquisition of aircraft parts and equipment from U.S.-based companies, a move expected to send ripples through the global aerospace supply chain.
Boeing has begun flying its jets, which were previously refused by Chinese airlines, back to the US. On April 20, a 737 Max painted with the livery for China’s Xiamen Airlines made the return journey from Zhoushan and landed at Seattle’s Boeing Field.
A second Boeing jet intended for use by a Chinese airline was heading back to the US on April 21, flight tracking data showed. The 737 Max 8 landed in Guam, which is part of the 8,000km journey across the Pacific between Boeing’s US production hub in Seattle and the Zhoushan completion centre, where planes are ferried by Boeing for final work and delivery to a Chinese carrier.
Malaysia Airlines’ aircraft order
Captain Izham said that any additional aircraft acquired would not be part of MAG’s initial order of 25 aircraft, which are under a leasing arrangement with Air Lease Corporation (ALC). The aircraft from ALC’s order book with Boeing will be delivered to Malaysia Airlines from 2023 until the beginning of 2026.
“So if we are able to snatch this, we will need to go to the capital market to raise money for this,” he said. He noted that acquiring an aircraft is not a simple decision, as the airline company needs to consider specific requirements such as production line, ownership, production process, seat configuration etc. “Holistically, we want this aeroplane, but there are other considerations,” he said.
Strategic fleet expansion
Meanwhile, group chief strategy and transformation officer Bryan Foong said MAG is shifting its fleet strategy to meet the demands of the growing Asia Pacific regional network, particularly in congested capital cities in Southeast Asia.
“Today, we are a narrowbody Boeing 737 operator, but by 2035, we envision a more widebody-focused fleet. For example, destinations like the Asean capitals are very congested. But we simply cannot add more frequency to some routes due to congestion. So, we need bigger aircraft to increase capacity,” he said.
He also revealed plans to expand or replace the airline’s Airbus A350 fleet, with long-term goals set as far as 2043.
Reduce reliance on leases
Captain Izham also revealed plans to reduce reliance on operating leases by acquiring more aircraft outright.
Currently, around 80 per cent of the MAG fleet is leased, and the group’s ambition is to achieve a fleet balance of 50 per cent owned, 50 per cent leased, he said.
“Leased aircraft come with end-of-lease (EOL) costs. You must return them in near-new condition, which can be very expensive. Owning (aircraft) helps taper long-term costs,” he said.
Watch the video on Malaysia Airlines unveiling its Manchester United aircraft.
