Malaysia Airlines Plans to Buy 39 New Jets
11.03.2004, 12:28 AM
Flagship carrier Malaysia Airlines is planning to purchase 39 new jetliners in an estimated $1 billion plan to replace nearly half 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., Low Chee Teng, chief executive of airline operator Malaysian Airline System Bhd., said in an interview with Dow Jones Newswires.
Passenger comfort and fuel economy were the main reasons for the plan to replace the carrier's 39 narrow-body Boeing 737 planes, Low added. Malaysia Airlines flies 97 aircraft.
The cost of a new narrow-body passenger jet is between $25 million and $35 million, so the total cost of the planned purchase could exceed $1 billion, Low said.
Jet fuel will probably account for more than 30 percent of the carrier's total costs in the fiscal year ending March 2005, up from 23 percent in the previous year, he added.
Low declined to say how much he expects the higher fuel cost to affect net profit.
Capacity is forecast to rise between 10 percent and 20 percent in the current financial year, mostly due to more flights to Australia, China and India, Low said. Those flights have been added even though low-cost carriers also plan to penetrate markets in China and Australia.
Photo © Lee Archer