Malaysia Airlines to buy more A380s
Bloomberg in Kuala Lumpur
Malaysia Airlines plans to add more Airbus superjumbos to its fleet as modern, fuel-efficient aircraft will assist a turnaround from two consecutive years of losses.
The flag carrier, which has six A380s, might order "a few more" double-decker planes, chief executive Ahmad Jauhari Yahya said this week. A decision would be taken by year-end.
The new aircraft are needed to cut fuel expenses, which are the airline's biggest cost at 37 per cent, end losses, and take on competition from Singapore Airlines, which also boosted its A380 orders last year.
Asian carriers may help spur demand for Airbus' superjumbo, whose sales have suffered in recent years as a weak global economy and a flaw with a wing component damped orders, leading to some unsold production slots.
"It's better late than never," said Mohshin Aziz, an analyst at Maybank Investment Bank. "I believe the company will be profitable by the end of this year because by then it would have substantially refitted its fleet with brand new aircraft."
Malaysia Airlines would take delivery of 24 new aircraft this year and 25 more over the next two years, said Jauhari, who became the chief executive in September 2011. The carrier ordered 15 Airbus and 35 Boeing planes in 2011.
Malaysia Airlines currently flies its A380s to London, Hong Kong and Paris. The carrier has fitted the superjumbos with first-class seats bigger than single-bed mattresses as part of efforts to win more premium traffic. Flights with the 494-seat plane began in July last year with a service to London.
The airline is also retiring 30 aircraft from its fleet this year to cut costs. New planes typically consume less fuel than older ones. With the retirement of old planes and new aircraft coming, the average age of the carrier's fleet of 110 planes would be 5.4 years by year-end, Jauhari said.
The airline was targeting to achieve a passenger load factor of more than 80 per cent for the rest of the year from the current 78 per cent, he said.
The company's focus will be on Asian capitals and major tourist destinations in the region.
Competition is increasing for Malaysia Airlines as budget airlines expand in Southeast Asia.