LONDON – Reports from Bloomberg are stating that Malaysia Airlines is looking to double its Boeing 737 MAX order. What does the airline see in the aircraft?
The airline already has 25 737 MAX aircraft on order. If this was to be doubled, then total commitments would stand at around 50 aircraft, valued at $2.4bn.
Ismail: We Still Have Space…
CEO Izham Ismail said the following to the news outlet on ordering more aircraft:
“Our future network requires 50 narrowbody airplanes, so we have still got space for 25″.
“We have to make some decisions by next year.”
Ismail also gave quite an indicator to Bloomberg on what demand is like for the carrier at this present time.
“We don’t have enough aeroplanes”.
What Does Malaysia Airlines See In The Aircraft Then?
Deliveries of the aircraft type are due to begin for Malaysia Airlines in 2024, which is not far away at all.
The deal for 25 aircraft was announced back in July 2016, with options for another 25, which is what Ismail is currently talking about at this present time.
At the time, the-then CEO Peter Bellew said the following on that order:
“This deal is a game-changer for Malaysia Airlines with much lower costs and greater efficiency, which we will pass on to our loyal customers with lower fares”.
“With the 737 MAX’s longer range capabilities, we will be able to connect our passengers to more destinations, in greater comfort, and with superior economics.”
By June 2017, the airline converted 10 of its 25 MAX 8s on order into MAX10s and then added an additional eight options by September 2017.
It could be suggested that Ismail is in the same alignment as Bellew in the fact that the MAX will provide the lower costs that are needed for the airline to thrive well.
With there being substantial worry about the domestic market being at overcapacity, it would make sense for Malaysia Airlines to utilize the MAX on international services.
Low Cost The Priority After Turbulent Few Years…
In the last decade or so, Malaysia Airlines hasn’t had an easy period. Back in 2015, the airline was transferred to the newly founded Malaysia Airlines Berhad (MAB).
The airline made major cuts and streamlining in order to bring the aircraft back to some form of financial stability and went down the aircraft leasing route instead of direct purchases.
An example of this was when four new Airbus A350-900 aircraft were delivered by Air Lease Corporation.
MAB has also had a difficult time during the COVID-19 pandemic, where they needed to raise RM1 billion of capital annually if the Malaysian Government was to assist in the sustainability of their operations.
It remains clear that Malaysia Airlines is now beginning to get back to some form of normalcy, especially with the next stage of fleet expansion on the way in less than two years’ time.
From Ismail’s words about not having enough aircraft, this means that the demand is more than clearly present and visible for the airline to take advantage of, but he will need to implement this expansion quickly.
This means that the airline will have to choose carefully how they expand, as if they expand into the wrong places, it could end up becoming 2015 all over again.
To answer the question: Malaysia Airlines sees the MAX as an aircraft they can get behind, especially from the perspective of better efficiencies and lower fares for customers.