MAS to sell or lease A380 fleet?


  • Business
  • Friday, 01 May 2015

The report said the disposal of all six A380s presented an opportunity to test the market for used A380s.

PETALING JAYA: A day before Christoph Mueller took over as managing director/group chief executive officer of Malaysia Airlines (MAS), unconfirmed reports has surfaced that the airline had put several of its aircraft, including its six A380 super-jumbos, on sale or lease.

According to an aviation industry site, Leeham News, MAS is offering for sale or lease all six of its Airbus A380s, its two Boeing 747-400Fs, four Airbus A330-200Fs and four Boeing 777-200ERs, as it seeks to restructure following a disastrous 2014.

Another site, Flightglobal, added that an official from the airline had said that the airline intends to “approach the market to dispose some assets”, but would not be drawn into which types would be sold. The site said MAS had four A330 freighters, as well as 13 passenger A330s plus 13 777-200ERs.

Although not verified, the news has sent jitters across the airline’s crew and pilots, as they see it as the first signs of downsizing the workforce.

The sale could mean that 250 pilots and 300 crew members might be made redundant.

“Even before Mueller is on board, the plans are already out,” said an aviation executive. Mueller is scheduled to join MAS today.

Although this is not the first time that talk of aircraft sale and lease has surfaced, it has never involved such big numbers.

Just weeks ago, there was talk that MAS was in negotiations with Turkish Airlines to lease out two of its A380s. However, this had fallen through.

MAS. in a restructuring mode, will downsize its workforce to 14,000 people, thereby letting go of about 6,000 employees. The migration will take place on Sept 1.

MAS took delivery of its first A380 in May 2013 and flies the aircraft on the London and Paris routes. It had earlier used the aircraft for the Hong Kong route, but found it difficult to fill the plane since it seats more than 450 people.

Unlike MAS, Singapore Airlines (SIA) and Emirates, which have a large number of the A380, are using them extensively for their network. But since MAS has suspended many of its long-haul routes, including those to the United States, and even though London is its premium route, it may be finding it difficult to fill the aircraft, and may find it more suitable to hive off the plane and use the B777 for the European routes instead.

The report said the disposal of all six A380s presented an opportunity to test the market for used A380s and whether a key component to Airbus’ strategy for the super-jumbo going forward would work, namely, allowing airlines to try out the airplane without having to spend a lot of money to buy new ones.

After experiencing the A380, the theory goes that other carriers would understand how this could spur sales.

This theory was created in anticipation of the A380s coming off lease from SIA and later Emirates for airplanes that were 12 years or older.

MAS’ A380s are considerably younger.

The disposal of the A330-200Fs will not help Airbus sell new ones.

The price has raised questions about the return on investment of new-build, main-deck freighters (an issue with Boeing and its 747-8F and 777F as well). The relatively young 747-400Fs also will put pressure on Boeing’s ability to sell 747-8Fs to keep this line alive, the report said.

MAS lost two 777s last year – MH370 which went missing on March 8 last year and MH17, which was shot down over Ukraine.

Elimination of the freighters wipes out MASkargo.

Another site reported that the A380’s list price in 2012 was US$389.9mil (RM1.4bil), although it is speculated that airlines typically pay barely half the sticker.

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