Malaysia Airlines India, China expansion plans

3 April, 2008:

Going ahead with its plans to buy six Airbus A380s despite delivery delays, as part of its fleet expansion, Malaysia Airlines is also set to buy as many as 55 new Boeing 737-800 jets.

Malaysia Airlines has placed a firm order for 35 narrow-body B737-800 aircraft, with an option for another 20 planes. The 55 planes from Boeing Co
have a list price of $4.2 billion.

The new aircraft will allow Malaysia Airlines to expand to destinations previously not economically viable, said the airline adding that the focus will be on Asia, especially China and India. The airline expects to grow more in the Asian region than anywhere else.

Malaysia Airines also expects to take all six A380 superjumbos it has on order in 2011 after reaching a compromise with Airbus on compensation for a delay in delivery. The planes were originally due to be delivered over two years, starting in 2007.

According to Malaysia Airlines, the new fleets from both the aircraft makers will provide a strong platform for Malaysia Airlines to grow profitably. Though the delivery of these aircraft might take a while, they are expected to start operations when the weakness in the global economy fades off.

It has been pointed out that the B737-800 planes would be delivered starting September 2010, and they might replace the airline's existing single-aisle fleet. Malasia Airlines has the option to swap the B737-800 for the larger B737-900.

Significantly, Malaysia Airlines has gone in for a fleet expansion after the airline returned to the black in 2007 following two years of losses. The plans are part of its strategy to tap a five-year growth plan to open more routes in Asia to boost its long-term revenue. Malaysia Airlines aims to boost profits to as much as 3 billion ringgit by 2012.