Malaysia Airlines, Boeing in maintenance deal negotiations

Malaysian-Airlines-Boeing

KUALA LUMPUR: Malaysia Airlines Bhd (MAB) and Boeing Co are negotiating a maintenance, repair and overhaul (MRO) deal worth over RM5 billion.

They are working on a 12-year contract to service MAB’s new Boeing MAX and Dreamliner fleet, The Malaysian Reserve reported.

The report was based on an internal staff memo from MAB CEO Peter Bellew.

The maintenance, the memo said, would be financed via a cost-per-hour deal, paid monthly per aircraft as the operating hours of the aircraft were incurred.

The deal is part of the memorandum of understanding inked between MAB and Boeing to set up a specialist MRO facility in Sepang, during Prime Minister Najib Razak’s visit to the US last week.

Bellew said: “It will leverage on the existing underutilised hangar facilities in Sepang and require additional highly skilled engineering staff to service local and third-party international MRO contracts.”

He also told his staff that the company was still looking for six second-hand A330 aircraft to help in the upgrading of the airline’s Asian services.

“Ideally, we want to be able to obtain high quality A330 used aircraft with lie-flat beds and full in-flight entertainment systems to add to the fleet in 2018,” he said, according to The Malaysian Reserve.

Bellew said MAB had been searching for suitable additional wide-body aircraft for the last 12 months to enhance services to India, China, Hong Kong and North Asia.

He said the current A330 fleet was financed via a variety of finance and operating leases, including some export credit debt.

“Payments vary from quarterly to monthly. If additional good value aircraft can be sourced, they will be financed by operating leases,” he was quoted as saying.

MAB currently has 15 passenger and three specialised freight-only A330 aircraft.

The aircraft would start to end their leases between 2020 and 2025, The Malaysian Reserve reported.

“The company will continue to evaluate the new Airbus A330neo and Boeing 787-9 Dreamliner to replace this fleet of 15. This is of course, subject to a final decision by the board,” Bellew added.

MAS currently has 54 aircraft in its fleet of 737-800s, with 48 in actual operations. The remaining six aircraft – to be handed back to lessors in December 2017 – are currently going through a lease return maintenance programme.

In 2018, MAB will operate 44 737-800s aircraft daily, with three in maintenance and one available spare, according to The Malaysian Reserve.