Malaysian airline orders up to 55 Boeing 737-800 aircraft

[Nick W.]

ReutersPublished: March 31, 2008
KUALA LUMPUR: Malaysian Airline System said Monday that it ordered as many as 55 new Boeing 737-800 planes to help replace an aging fleet and expand operations in Asia.

The airline said it had placed a firm order for 35 Boeings, with an option for an additional 20 in a deal worth $4.2 billion at list prices.

The airline also has the option to swap the B737-800 series for the larger B737-900 configuration.

"We expect to take delivery of the first aircraft from September 2010 onwards," the chief executive, Idris Jala, said in a statement.

He added that the new planes would let the airline expand its network to places that previously were not economically viable. The aircraft will be used mainly for routes in Southeast Asia, the Malaysian domestic sector and China and India, Jala said in the statement.

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"We will likely partially purchase the Boeing 737-800 on our own and partially lease them as that would give us the flexibility to manage our balance sheet and financing commitments, and sell some of them when the timing is right," he said.

Last week, the chief financial officer, Tengku Azmil Zahruddin, said that the airline planned to announce the orders within a month.

The airline also said it would take delivery of six Airbus A380-800 superjumbos in 2011.

Delivery was originally been scheduled from January 2007 to December 2008 but was delayed by wiring glitches that pushed Airbus into a loss.

Malaysian Airline System said a compensation agreement had been reached but gave no details.

The airline reported a net profit of 851.4 million ringgit, or $266 million, last year, ending two years of losses with turnaround plan that has produced better yields while reducing costs.

Analysts estimated that the airline's 2008 net profit would be 758.5 million ringgit, rising to 989.7 million in 2009.

International Herald Tribune

[Andrew M]

Good to see a large 737 order for a change, getting tired of all the A320 orders.

That being said I prefer to fly the A320

[Shameel Kumar]

I wonder what impact (if any) this will have on the B787/A350 evaluation that they are yet to decide on.

So we know that they will have 737's at the lower-end of their fleet, and the A380 as their key VLA...wonder who's gonna win the rest of their fleet renewal evaluation.

Excellent news for Boeing, the 737 and for MH.