Malaysia Airlines sticks to end-2022 timeline to sell its A380 fleet

Malaysia Airlines sticks to end-2022 timeline to sell its A380 fleet
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KUALA LUMPUR (June 23): Malaysia Airlines Bhd (MAB) is sticking to its internal timeline of hiving off either all or part of its six A380-800 super jumbos by the end of this year, said its managing director and group chief executive officer Captain Izham Ismail.

“We are in conversation with a few interested parties. Our internal target is to dispose of the aircraft by the end of this year,” he told the Malaysian media on the sidelines of the 78th International Air Transport Association's Annual General Meeting and World Air Transport Summit in Doha, Qatar on Tuesday (June 21).

“It depends on the deal. We don’t know yet,” he said on whether the national carrier expects to sell all six A380s.

“But the A380s are no longer in our network plans anymore. The aircraft have been placed in long-term parking,” he said. 

"If you look at future aircraft technologies, it is all about twin-engine and long-range. If you want to be competitive, you cannot put an A380 in play because the operating cost is high. It will not bring us to the level playing field (in order) to be competitive. No doubt the product of the A380 is superior, but at the end of the day, it comes down to profit and loss.”

“While it was a good decision (to acquire the A380s) back then (2003), the first aircraft was supposed to be delivered in 2007 but they got delayed in production. Eventually, when we took delivery of our first A380 in May 2012, the market had changed,” he noted.

Malaysia Airlines currently operates a fleet of 74 aircraft, comprising six A350s, 21 A330-200s/300s and 47 737-800s.

Izham also said the airline is in the final stages of negotiation with several lessors for 21 A330 wide-bodies and aims for entry into service by the second quarter of 2024.

The new planes would come on top of the 25 737 MAX jets it will take delivery from Boeing starting next year. 

Deliveries of the 737 MAX planes were initially scheduled to commence in July last year, but Malaysia suspended the aircraft in March 2019 after the MAX planes were grounded worldwide following two deadly crashes.

“The timing of the new aircraft that come in must be aligned with the end of lease of the old aircraft,”  Izham added.

The airline will lease the majority of the 21 A330s rather than buy them, he said, noting that MAB’s history for the last five years has been 100% leased. It has learnt a lot from the Covid-19 pandemic.

“In our fleet (replacement) campaign, we must be very clear that we don’t put unnecessary stress on our balance sheet. If we were to buy (the aircraft), it would put stress (on our balance sheet). But we also cannot put all our risks in one basket. So even if we buy aircraft, the percentage will be small,” he said, adding that the carrier can consider either finance or operating leases or sale and leaseback options.

Tan Choe Choe