Malaysia Airlines to keep Airbus A380s after sales bid fails

Malaysia Airlines (Mas) has delayed plans to sell some of its Airbus A380 jumbo jets, and will now keep all six of them, at least until 2018, after retiring its fleet of Boeing 777s, its chief executive said.

The Kuala Lumpur-based carrier has tried without success to find a buyer for the planes for the past year. The sales bid was part of a restructuring plan to cut costs, which also involved Mas withdrawing from several long-haul European routes.

After accelerating the retirement of its much older Boeing 777-200 fleet, the airline has decided to keep the A380s in service until it gets the first of its new Airbus A350 wide-body jets, Christoph Mueller said ahead of the Singapore Airshow.

“We need them for the long-haul market,” said Mr Mueller of the A380s, which the airline flies only to London. “We are still evaluating what we want to do with the A380. We have six and we will keep them at least until 2018, when we get the first A350.”

Mas is also evaluating if it needs two more A350s to add to the four that it will get from leasing companies, Mr Mueller said, adding that these planes would serve medium-haul, intra-Asia Pacific routes that the airline would focus on as part of its post-restructuring strategy.

Mr Mueller, an experienced industry executive, was hired to push through the reshaping of Mas in May last year after the Malaysian national investment firm Khazanah took it private.

Mas suffered a massive blow to its brand after flight MH370, which was carrying 239 passengers and crew, disappeared in March 2014. In July 2014, another flight, MH17, was shot down over eastern Ukraine, killing all 298 people aboard.

Mr Mueller said the airline still aimed to return to profit by 2018. “We are not profitable yet but we are getting there,” he said. “The markets are soft now, and that’s not just China. All segments are affected. But we can overcome that.”

As part of its restructuring, the airline has suspended non-stop services to Amsterdam, Paris and Dubai, and is using a new codeshare partnership with Emirates to connect its passengers to destinations in Europe, Africa and the US.

Mr Mueller said Mas hoped to extend this codeshare to “all points” on the airlines’ combined networks to “give us many points in, for example Africa and Europe, that we can’t fly to but where there is demand”.

One challenge to the restructuring programme has been the depreciation of the ringgit against the US dollar, with many costs such as fuel prices and aircraft lease pegged to the greenback, Mr Mueller said.

In a bid to increase revenue to offset higher costs, the airline is looking at ways to attract more passengers and upgrade its in-flight offerings, such as introducing a new business class product this year and possibly adding in-flight mobile and internet connectivity.

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