U-TURN BACK TO BANKRUPTCY & BAILOUTS? STILL AILING MAS TO ADD WIDE-BODY AIRCRAFT IN BID TO ‘REGAIN PREMIUM STATUS’

PETALING JAYA – Malaysia Airlines Bhd (MAB), which is aiming to get back its five-star rating from Skytrax next year, is bolstering its premium airline ambitions by taking on more wide-body aircraft.

“We have gone too much the other way (narrow bodies), the fleet we have at the moment is very similar to what you would see in more of the low-cost carrier environment and we are going to try to relatively quickly rebalance that over the next few years,” its CEO Peter Bellew told reporters at a briefing today.

He said MAB’s fleet strategy is to address the mismatch between the type of aircraft and routes that will support its strategy going forward. He said the airline has too many narrow bodies at the moment and not enough wide bodies.

MAB’s fleet size is now at 69, comprising 48 narrow bodies and 21 wide bodies. The fleet size will reach 75 next year, comprising 48 narrow bodies and 27 wide bodies. By 2022, it will have 80 aircraft comprising 45 narrow bodies and 35 wide bodies.

The fleet strategy includes the delivery of six A350-900s that will replace six A380s, leasing of six A330-200 ex-Air Berlin aircraft and the memorandum of understanding with Boeing for eight Boeing 787-9 aircraft.

“We will continuously adjust and flex this as market improves and opportunity arises …right now we are at 70% narrow bodies and 30% wide bodies. We want to rebalance that over the next five years closer to 56% narrow and 44% wide.

“That is what a normal national carrier with a premium service does. If you are trying to get people to travel business class and you want to fly longer distances, you need to have wide-body aircraft,” Bellew said, adding that the rebalancing plan will result in 5-20% cost savings in terms of leasing cost.

Bellew said the six ex-Air Berlin aircraft will be leased from Aercap, in a deal that will cost less than the leasing cost of its existing wide bodies. Air Berlin, which is going into liquidation, has had a massive refurbishment exercise and this will enable MAB to rapidly improve its product next year.

The six aircraft will be delivered in February, June and October next year, with two each month. They can be used for flights to Mumbai, Delhi, Shanghai, Hong Kong and Bali.

Bellew said with wide-body aircraft, MAB will be able to offer lie-flat seats in business class compared with sloping seats in the narrow bodies. It will also provide them the flexibility of flying long-haul flights in the future if shareholders choose to return to destinations in the Americas or Europe.

“We’ve only ordered eight long-haul capable 787-9, which is just as happy and economical going to Tokyo or Beijing as it is going from here to San Francisco. Over the course of 10-12 years, the cost is not much different from the cost of the A330 but it gives flexibility and option, if we ever want to go back to those markets, we can do.”

Bellew said there will be significant shifts in the industry and the way people travel over the next three to four years, with transits via the Gulf states becoming less common with fewer options to do so.

He added that contractions could be seen in the Gulf carriers and there could be an opportunity to have direct connectivity to destinations in Europe and the US in the next five to six years.

Bellew said MAB is on track to be profitable by the second half of 2018 and should be “listable” by 2019, although the decision to list lies with the shareholders.

Bellew, whose contract lasts till 2019, said he will not be leaving MAB, contrary to talk of him returning to Ryanair, and succession is not an issue as there are five to six internal candidates who could take over when needed.

– Sundaily

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