The deal now under discussion would be worth $2.2 billion at list prices. But Malaysian Prime Minister Najib Razak and President Donald Trump tossed around much bigger numbers in talking of future possibilities.
Malaysia Airlines is closing in on a multibillion-dollar order for Boeing 787 Dreamliners, 737 MAX 10 jets and General Electric engines, Malaysian Prime Minister Najib Razak said.
The Malaysian flag carrier plans to order eight Boeing 787-9 Dreamliners, and possibly double its order for 25 of the single-aisle Max over the next five years, Najib said at a meeting Tuesday with President Donald Trump at the White House.
A memorandum of understanding (MOU) was signed Tuesday evening.
The MOU, which is not yet a firm order, adds only the eight Dreamliners to the existing Malaysia Airlines order book.
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That’s worth $2.2 billion at list prices. But according to market-pricing data from aircraft valuation firm Avitas, the real value after standard discounts is about $1.2 billion.
The agreement, if finalized, will mark a victory for Boeing in a competition that had been viewed as favoring rival Airbus.
Malaysia had been in talks for the European plane maker’s A330neo widebody jets but had been unable to reach a deal on price, Chief Executive Peter Bellew said in June.
Trump used the occasion to talk up the value of the deals being announced, both agreed and possible in the future. “We’re talking about trade — very large trade deals,” he said.
“We’re working on one deal where between $10 and $20 billion dollars’ worth of Boeing jets are going to be purchased, General Electric engines will be purchased and many other things,” Trump said.
Najib said there is a “strong probability — not possibility — probability that we will add 25 more 737 MAX 10 in the near future. So within five years, the deal will be worth beyond $10 billion.”
An order for 25 Boeing 737 MAX 10s would, in fact, be worth $3.1 billion at list prices, or an Avitas-estimated $1.3 billion.
Najib also said that his government will “also try to persuade AirAsia to purchase GE engines,” presumably referring to the CFM engines — sold jointly in a 50:50 joint venture by GE and Safran of France — to power Air Asia’s Airbus A320neo jets. In fact, AirAsia has ordered nothing but CFM engines for its neo jets since 2011.
Najib also pledged that a Malaysian fund would invest $3 billion to $4 billion to support U.S. “infrastructure redevelopment.”
Malaysia Air has been trying to win back customers after two fatal air disasters in 2014. The airline leased six Airbus A350s to offer flights to London next year. It has also ordered 737 MAX 9 and Max 10 aircraft from Boeing with deliveries expected in 2019 and 2021, respectively.