MAS buying 39 planes to replace half of its fleet

  • Business
  • Thursday, 04 Nov 2004

MALAYSIA Airlines (MAS) is planning to purchase 39 new jetliners under an estimated US$1bil plan to replace nearly half of its fleet, a company executive said. 

The plan indicates that Malaysia Airlines hopes to expand its routes and capacity despite rising fuel prices and competition from Asia’s emerging low-cost carriers. 

The carrier expects to reach a decision by the end of April on possibly buying the planes from Airbus SAS or Boeing Co, MAS chief financial officer Low Chee Teng said in a recent interview with Dow Jones Newswires

Passenger comfort and fuel economy were the main reasons to replace the carrier’s 39 narrow-body Boeing 737 planes, Low added. Malaysia Airlines has 97 aircraft. 

The cost of the new narrow-body passenger jet is between US$25mil (and US$35mil each, meaning the planned purchase could exceed US$1bil, Low said. 

Malaysia Airlines is also hedging a bigger portion of its fuel needs and refurbishing business and first class seats to raise revenue and enhance its image, Low said. 

Jet fuel will probably account for more than 30% of the carrier’s total costs in the fiscal year ending March 2005, up from 23% a year ago, he added. 

Capacity is forecast to rise between 10% and 20% in the current financial year, mostly due to more flights to Australia, China and India, Low said.  

Those flights have been added despite the fact that low-cost carriers also plan to penetrate markets in China and Australia. – AP  

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