Malaysia Aviation Group Eyes Boeing Jets Amid China Delivery Uncertainty

SEOUL: According to Bernama, the Malaysian state news agency, Malaysia Aviation Group (MAG), the parent company of Malaysia Airlines, is in discussions with Boeing regarding the potential acquisition of new aircraft. These jets may become available if Chinese airlines cease taking deliveries, according to the managing director.

Boeing appears to be re-routing some of its 737 MAX aircraft from China back to the United States. These planes had been stationed in China in anticipation of delivery to Chinese clients.

Neither Boeing nor China has issued a statement regarding the reason for the planes’ return, and it remains unclear which entity initiated the decision.

Malaysia Airlines has not yet provided a response to a request for comment.

Bernama reported that MAG’s Izham Ismail views potential availability of Boeing delivery slots, resulting from trade tensions between the U.S. and China, as an opportunity to expedite deliveries.

Ismail stated, “MAG is in conversation with Boeing about whether we can take over those slots,” according to Bernama.

Globally, airlines are eager to acquire new aircraft. However, they are encountering prolonged delivery times due to supply chain issues that arose after the pandemic, as well as a slowdown in Boeing’s production due to heightened regulatory oversight and a labor action.

Malaysia Airlines has reported a decline in profits for 2024, citing operational challenges.

MAG, which is owned by the Malaysian sovereign wealth fund Khazanah Nasional, has been steadily expanding and modernizing its fleet. The goal is to have a narrow-body fleet consisting of 55 next-generation 737 MAX aircraft by the year 2030.

Last month, the company announced its intention to purchase 18 737 MAX 8 aircraft and 12 737 MAX 10 aircraft, along with an option to acquire an additional 30 aircraft.

Additionally, there is an agreement in place to lease 25 737 MAX aircraft from Air Lease Corp between the years 2023 and 2026.

Ismail clarified that any possible agreement to assume additional aircraft from vacated delivery slots would not be included in the Air Lease Corp arrangement, and MAG would need to access the capital market to secure additional funding.