Dreamliners purchase made in long-term interests, says MAS CEO

Peter-Bellew-boeingPETALING JAYA: Malaysia Airlines chief executive officer Peter Bellew today defended the order for 16 new Boeing aircraft amid claims that the national carrier is backtracking on its five-year recovery plan unveiled in 2014.

The deal, which was discussed during Prime Minister Najib Razak’s recent visit to the US, includes eight 787-9 Dreamliners through conversion of a previous order of eight Boeing 737 MAX, and eight 737 MAX 8s. Boeing’s Global Fleet Care service is also part of the deal.

In an email to The Edge financial daily, Bellew rubbished talk of flip-flops on its recovery scheme, along with rumours that the airline is looking to restart the long-haul routes that were cut as part of the RM6 billion plan.

“The strategy (from 2014) to 2019 continues to focus on Asia, Australia, New Zealand, India and the Middle East.

“But you need a high quality plane with good economics and the 787-9 is proving a great success for other airlines flying to Kuala Lumpur,” he was quoted as saying.

Bellew, who is also Malaysia Airlines managing director, said the 787-9 was a good option for the long term.

“For the longer term – and you have to think that way in aviation – the 787-9 can operate anywhere that the airline would wish and it gives complete flexibility at a great price.

“There is strong demand from KL for direct services to big global capitals that is not being serviced now. This may create profitable opportunities for Malaysia Airlines in the future and this plane can service that while cost effectively giving great service in our current market.

“The (Dreamliner) aircraft has great economics, huge flexibility and a tremendous passenger comfort. (These aircraft) operate regularly now from Kuala Lumpur to Japan and the Middle East, and passengers will expect the very best from Malaysia Airlines in the next decade,” he said in the email.

In a recent report by The Malaysian Reserve, critics had questioned the deal, pointing out that the airline had yet to return to profitability.

Malaysia Airlines however justified the purchase as part of its plan to become a premier airline, with Bellew saying in a memo to its 14,000 staff that the recent purchase of the Boeing MAX and the 787-9 Dreamliners coincided with the end of the other lease agreements.

The first of the eight Dreamliners, with a list price of US$2.5 billion (RM10.5 billion), is reportedly expected in the third quarter of 2019.

According to The Malaysian Reserve, Bellew said the airline’s current 48 737-800 fleet would reach the end of the lease period in early 2019.

In the report, Bellew was quoted as saying that MAS would not finance or own the 16 new Boeing aircraft.

Instead, he said, it would sign leasing arrangements with global lessors and lenders who would foot the bill for the planes.