Malaysia Airlines placed a firm order for 35 Boeing 737-800 jets, worth $2.6 billion at list price, and took options for 20 more.
Malaysia Airlines said Monday it will acquire up to 55 new Boeing 737-800 jets, and go ahead with previously announced plans to buy six Airbus A380s despite delivery delays as part of its fleet expansion.
Malasia’s flagship carrier has placed a firm order for 35 narrow-body B737-800 aircraft, with an option for another 20 planes, the airline’s Chief Executive Idris Jala said in a statement.
The firm order has a list price of $2.6 billion. The estimated actual order value, based on data from aircraft valuation firm Avitas, is about $1.6 billlion. Airlines typically get discounts for bulk purchases.
Jala also said the airline expects to take all six A380 superjumbos it has on order in 2011 after reaching a compromise with Airbus on compensation for a delay in delivery. The planes were originally due to be delivered over two years, starting in 2007.
Most Read Business Stories
- 55,000 in Washington state may have to pay back thousands in jobless benefits
- 1 house, 45 offers: Homebuyers in Western Washington hard-pressed as supply remains scarce
- Boeing CEO gave up millions in pay; here's what he and other top execs earned
- Amazon's telehealth arm quietly expands to 21 more states
- Inflation isn't the big risk, with economy's recovery still uncertain
“I am very excited with these developments as these new fleets will both form a strong platform for Malaysia Airlines to profitably grow,” he said in the statement.
“The deliveries will not happen for a few years yet, when the weakness in the global economy should be less of a concern,” he said.
Jala didn’t disclose the amount of compensation that the airline will get from Airbus for the delay on the A380.
The B737-800 planes are to be delivered starting on September 2010 to replace the airline’s existing single-aisle fleet, he said. The carrier has the option to swap the B737-800 to the larger B737-900, he said.
The new aircraft will allow Malaysia Airlines to expand to destinations previously not economically viable, he said. The focus will on Asia, especially China and India, he said.
“We are now gearing ourselves to benefit from the growth of this region,” he said.
The fleet expansion plans come after the airline returned to the black in 2007 following two years of losses, and forms part of an ambitious five-year growth plan to open more routes in Asia to boost its long-term revenue.
Malaysia Airline earned $266 million last year and said it has cash reserves of $1.6 billion to finance aircraft purchases.