By Putu Deny Wijaya
Malaysia Airlines Finalizes Leases for 25 Boeing 737 MAX 8s
Under a contract with Air Lease Corporation (ALC), Malaysia Airlines will get 25 new Boeing 737 MAX 8s from its order book. The purchase, which comes from Malaysia Airlines’ order book with Boeing, will enable the carrier to take possession of new aircraft and continue to pursue its strategic objectives of domestic and medium-haul domination.
The planes will begin arriving at the airline in 2023 and continue until early 2026.
“We are happy to have in ALC, a partner who is committed to be part of our future endeavors as outlined in our Long-Term Business Plan 2.0 (‘LTBP2.0’),” Izham Ismail, Chief Executive Officer of Malaysia Aviation Group, which is the parent company of Malaysia Airlines, said about the deal. “The 737-8 is key to LTBP2.0 with its superior product offerings and better fleet performance which includes amongst others, improved fuel efficiencies of up to 15%. This aligns well with our sustainability journey, whilst also enabling MAB with greater flexibility and agility to implement our future network strategies.”
In 2016, Malaysia Airlines placed a definite order for 25 MAX 8 aircraft. Due to the grounding of the MAX and the worldwide health crisis, deliveries of the plane have been delayed.
Planning for the Future
Malaysia Airlines is in the process of putting its long-term business strategy into action. As the airline works to recover from the crisis, it is developing measures to cut expenses and become a stronger carrier in the future. This has included retiring its fleet of Airbus A380s and replacing them with more fuel-efficient planes.
Malaysia Airlines’ duty as the country’s flag carrier is to assist link communities throughout Malaysia and to the rest of the globe. Moving forward, the airline is focused on securing its position as a major airline linking Europe and Asia, as well as expanding its offering of connecting flights.
The Boeing 737 MAX 8 is one such possibility. As a fuel-efficient aircraft, the type has been employed for local and medium-haul connections across the globe, while others are trying to expand the capabilities to operate long-haul routes. Because the airline does not presently operate any MAX aircraft, it is unclear how these jets will be deployed within their route.
ALC’s Comeback
ALC is a significant aircraft lessor with customers all over the globe, though it is headquartered in the U.S. ALC also holds six Airbus A350-900 XWBs on long-term lease with Malaysia Airlines, in addition to these 25 aircraft. Airlines may occasionally place orders without obtaining finance for such items and will make judgments about leasing versus financing or paying in full closer to delivery.
Air Lease Corporation has been busy forging agreements with numerous airlines as the airline industry has recovered. Spirit Airlines and Alaska Airlines are among them. ALC reported in November that narrowbody demand was rebounding strongly. Finally, shortly before the end of the year, the airline placed an order with Airbus for 116 aircraft.
As both Malaysia Airlines and ALC look to the future, this leasing arrangement will benefit both airlines and help Malaysia Airlines achieve its long-term goals.
Putu Deny Wijaya was always an aviation enthusiast by heart, growing up in Indonesia where air transport is very vital. His first love is The Queen of The Skies, serving the trunk routes between Jakarta and Denpasar. He brought along this passion with him throughout college by conducting his bachelor study abroad in the Netherlands for the purpose of experiencing a nonstop 14-hour long-haul flight. For Putu the sky’s the limit when talking about aviation. He hopes that he would be able to combine his passion for aviation and knowledge of finance at the same time.
