Fleet Expansion Imperative | Malaysia Airlines to buy Eight Boeing 787 jets

KUALA LUMPUR: Malaysia Airlines plans to buy eight widebody Boeing 787 jets. The deal, worth more than $1.8bn at list prices, is expected to be one of the announcements that will be made after Prime Minister Najib Razak Najib meets with US President Donald Trump, the sources said. The United States was Malaysia’s third-largest trading partner in 2016.

The meeting with Trump is critical for Najib, who is looking to raise his standing globally, and in Malaysia, where he is expected to call general elections in the coming months.

Najib is scheduled to witness a memorandum of understanding signing ceremony between Malaysia Airlines and Boeing, according to a schedule of the Prime Minister’s events in Washington reported by Malaysian media outlets.

The two sources said Malaysia Airlines considered buying Airbus A330neos before settling on the 787 order.

Aircraft manufacturers typically give discounts to list prices.

Malaysia Airlines said it would not comment on reports that are speculative in nature. Boeing and Airbus declined tocomment.The sources did not want to be named because the discussions were private.

Brendan Sobie, chief analyst at independent aviation research firm CAPA Centre for Aviation, said the timing of the order alongside Najib’s visit raised concerns of potential political influence over the purchase.

“This has happened before with Malaysia Airlines – and other airlines in this region for that matter – where the government has decided to buy an airplane that wasn’t really required,” Singapore-based Sobie said. “I think in this case the 787 is required anyway.

Malaysia Airlines chief executive Peter Bellew said in June the carrier was in early negotiations with Airbus and Boeing for the purchase of 35-40 new long-range jets.

CAPA analyst Sobie said the airline needed widebodies for growth, as well as to replace ageing A330 aircraft over the next several years, making eight aircraft a smaller than expected order.

In the eight months ended August 31, Boeing announced 426 net orders compared to 215 at Airbus.

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