Malaysia Airlines 'selling off fleet of aircraft' after Flight MH370 and MH17 tragedies
MALAYSIA AIRLINES is reportedly selling off a fleet of its aircraft as the company seeks to recover from a disastrous year, which saw one of its flights disappear without trace and another shot down.
The Asian aviation group lost two Boeing 777-200ERs last year, when Flight MH370 disappeared while en route to Beijing from Kuala Lumpur and Flight MH17 was shot down over Ukraine.
But now the company is attempted to restructure its fleet by offering 16 of its aircraft for sale or lease, according to an aviation blog.
The company will reportedly be selling off all six of its Airbus A380s, two Boeing 747-400Fs, four A330-200Fs and four Boeing 777-200ERs.
Reported on the respected aviation website Leeham News and Comment, the page read: "The disposal of all six A380s presents an opportunity to test the market for used A380s and whether a key component to Airbus' strategy for the super jumbo going forward will work: allow airlines to try out the airplane without having to spent the huge amount of money required to buy new.
"After experiencing the A380, the theory goes, other carriers will understand how this can spur sales.
"This theory was created in anticipation of A380s coming off lease from Singapore Airlines and later Emirates Airlines for airplanes that are 12 years or older. The MAS A380s are considerably younger."
Malaysia Airlines Flight MH370 disappeared on March 8 last year, leaving behind no trace of wreckage of any sign of the 239 passengers and crew on board.
The search area was narrowed down to a vast section of the Indian Ocean which teams scoured for months on end to no avail.
Following a four-month hiatus, the hunt resumed in October with teams armed with equipment to scour the sea floor.
Investigators believe the aircraft ran out of fuel and crashed somewhere in a 23,000 square mile region.
Flight MH17 was shot down on July 7 last year - resulting in the deaths of all 298 people on board.
It is widely believed that the plane was blown out of the sky by Vladimir Putin-backed militia during the ongoing Ukraine conflict.
Both Moscow and the Russian president have denied responsibility.
Malaysia A380 Decision Deepens Airbus Worries
Airbus
Airbus Group Chief Financial Officer Harald Wilhelm says he “cannot see” the alleged decision byMalaysia Airlines (MAS) to sell or lease out its entire Airbus A380 fleet “impacting our campaigns” for more orders.
MAS is understood to have decided to phase out its six Airbus A380s over time in an effort to reduce its long-haul capacity and to focus on a more regional network, a significant part of its restructuring. According to one senior airline source, MAS and Turkish Airlines have been talking about a lease deal for two Malaysia aircraft as Turkish expands its long-haul capacity. MAS said on Friday that it is "still working to finalize the business plan" and that "exploring fleet options to enhance viability of long-haul sectors is one area being looked into."
Ex-Aer Lingus CEO Christoph Mueller took over as MAS’s new Managing Director and CEO on April 30, replacing Ahmad Jauhari Yahya.
Wilhelm said on Thursday that the move was “a fleet-planning decision by a customer.” Airbus separately said that the aircraft “has enjoyed great success with MAS and is extremely popular with the airline’s customers.” IAG CEO Willie Walsh separately said on the same day that in principle he would be open to considering second-hand A380s, but that decision is still a few years out, in his opinion.
But contrary to Wilhelm’s remarks, the availability of six very young second-hand A380s on the market must be highly unwelcome news for Airbus as it struggles to find new customers for the aircraft. Airbus is already dealing with remarketing six A380s coming from the canceled Skymark order, some of which have already been built.
It is also facing the very real prospect that Turkish Airlines may opt to at least partly go for used aircraft, rather than the fleet of all-new A380s it has also been considering. Pricing power, too, will be affected, in campaigns in which the MAS aircraft arise as an option.
According to Wilhelm, A380 production of 30 aircraft is sold out in 2015-16, but there are open slots in 2017. “We still have time to add to [the order book],” he said.
Airbus plans to break even in terms of production costs for the first time in 2015, but for that target to be met, the manufacturer cannot reduce the annual rate too-far below 30 units.
Once confirmed, MAS will be the first airline to decide to retire an operational A380 fleet. In addition to Skymark, other orders have been canceled, including those by Hong Kong Airlines and Kingfisher. Air France and Lufthansa have reduced the number of units they will take. On the other hand, Emirates continues to expand its A380 fleet and now has a total of 140 aircraft on firm order.
