As most of you probably know, Malaysia Airlines is in a terrible financial situation after losing two 777s last year, and is about to undergo a change in leadership and a major restructuring. As part of the restructuring, Malaysia is planning on greatly reducing the size of the airline, especially in regards to their longhaul operations.
What I didn’t realize originally was the degree to which they plan on downsizing.
Via Leeham, Malaysia Airlines is trying to sell or lease all six of their Airbus A380s, as well as four of their 13 Boeing 777-200s.
While I understand Malaysia Airlines’ need to downsize, that’s a pretty shocking restructuring, given that the A380 is the plane they use on their London and Paris routes, and also the only plane in their fleet with fully flat beds in first & business class.
From what I understand they’re actually doing reasonably well on those routes, so I’m guessing the issue is more that they’re strapped for cash, rather than those routes being the most unprofitable ones.
Meanwhile their 777s and A330s have angled seats in business class, and they haven’t announced any plans to update those seats yet. If they manage to sell the A380s, they’ll be stuck with a grossly uncompetitive longhaul fleet, which certainly won’t help them with a profitable recovery either.
Man, I really don’t envy the situation Malaysia is in. I can appreciate their issues and that they need to downsize their longhaul fleet, but at the same time they have a ton of competition from low cost carriers on short-haul flights as well, so that’s not exactly a road to profitability.
I’m very curious to see what their new CEO does, who is one of the brightest guys in the industry (he has turned around Aer Lingus, so hopefully he can do the same at Malaysia).
In the meantime, I’m curious to see if Malaysia manages to lease or sell their A380s. There have been rumors of Turkish eying some A380 leases for a long time, so something tells me that might finally come to fruition. Otherwise it wouldn’t surprise me if Qatar Airways buys them. They only have a total of six on order, and they’ve been very pleased with the performance of the plane so far.
Which airline do you think is most likely to buy/lease Malaysia’s A380s?
Sell A380, oh NO and bring back B747! Why?
I always choose the A380 from either HKG-KUL-HKG. It is a very spacious and comfortable aircraft and it is always FULL!
Dear Lucky,
Do you know what company/contact who is handling the sale of the Malaysia Airlines A380's?
Thanks,
Rob
Malaysia Airlines has been bleeding billions for ages. Even this latest turnaround plan is getting financed by usd2 billion of government ie taxpayer money.
in underdeveloped countries often the way bribes are paid is where planes go and no business logic applies. look at the massive expansion by Air India when virtually every single route (except those to the middle east) were losing money. Then again the ex Aviation Minister seems to be living in a 10K plus sq ft apartment in Bombay where prices are over $2K per sq ft!
2 MH380s are for immediate sale/lease.The other 4 are only available in 2016. So all who have F or C booked this year should have little to be anxious about. :)
Here's the Leeham article link if you've missed it at the top: http://leehamnews.com/2015/04/30/malaysia-air-fleet-restructuring/
@italdesign, on the contrary. If oneworld is weak in Asia, then having MH restructure into a (strong) regional airline would be pretty darn useful in strengthening an intra-Asia network
i don't understand MH's strategy of focusing on regional. they will never be able to compete with all these low cost carriers that already have a strong foothold in the region. why not leave domestic & regional to the low cost carriers & focus on profitable longhaul routes instead?
@ glenn -- My thought exactly!
If there is one thing Airbus doesn't need its more used A380s on the market.
@H I hear that as soon as feasible. When is your flight? Most likely will be rerouted on BA LHR-KUL or CDG-LHR-KUL, and if BA is stingy with F (and it sure is) have to settle with J, or cancel
This has been circulating in the news for some time, so this does not surprise me at all. That being said, that was the exact reason why I booked my around the world trip and flew the Mh A380 in First for my birthday last year. Malaysia Airlines First Class offers amazing service and I am very happy I got to fly it and book it when I did. Also, I don't...
This has been circulating in the news for some time, so this does not surprise me at all. That being said, that was the exact reason why I booked my around the world trip and flew the Mh A380 in First for my birthday last year. Malaysia Airlines First Class offers amazing service and I am very happy I got to fly it and book it when I did. Also, I don't believe that the route is doing that great. In November when I flew the route I was the only passenger in First class and business class only had about 30 people booked in. The FAs confirmed that these were normal flight loads with 1-4 people each day in First, and 20-50 in business. They claim economy is going out near full every day. But we all know that business and first is what pays for the plane. Everything the new management of MH has been saying is to focus on regional service and mid-haul service and rely on partners for long haul service. CDG & LHR are on the chopping block. Also BA has launched KUL service and will up gauge the daily service if MH pulls out. Before MH held a monopoly on this route.
Weren't Ryanair looking for long haul aircraft to start transatlantic operations? 800 seats on a A380??
I kind of hope that one of the group of AA/DL/UA will try to snatch them up, but that's much more of a dreamy wish than a realistic expectation.
I can see QR or EY buying them and simply using the current configuration for routes that are low yield/high volume which tend to be Middle East to Africa or south/Southeast Asia.
I can also see one of the Chinese airlines buying them foreseeing the tremendous travel growth potential in China.
Nooooo, I booked MH KUL-LHR in C for September just a couple of weeks ago so that I can try their service offering.
I echo the concern of some of the other blog readers about what may happen to those holding first class tickets if Malaysia gets rid of the planes before the flight dates. Ben -- What do you think???
@ Craig -- Wouldn't worry about it, as they can operate LHR and CDG with four A380s, which they have for at least another year. And I doubt anyone will be quick to buy them anyway.
@31583 no way is Emirates buying these, they're starting to replace their 1st delivered A380s with new ones and selling off the originals. That's crazy talk.
Even crazier is my thought that United are in the market for used wide bodies and could buy them. I should get my head examined. (May be a good bet for the 777s, though)
1 Billion USD for all 6 I meant.
Frankly MH's offering is sufficiently uncompetitive that going backwards with business class seating is unlikely to change things very much.
Look for example at their flagship business class lounge: www.milesdownunder.com/2015/01/mh-golden-lounge-business-class-kul-satellite/
@31583
2.4 Billion is the sticker price, a Wall Street Journal article claims airlines got the A380 at half that price.
And that was new, and is buyers marked for A380 at the moment, my guess if the buyer is willing to pay up front before getting the planes under 1 Billion.
Ouch. I just booked a seat in F from LHR to KHL for the end of September just so I could fly the A380. How soon do you think they might get rid of their A380's? If they do, what are my options for switching to another airline on a US Air award ticket?
@ Adam -- They'll hold onto at least four for another year, so you'll be fine.
Qatar has 10 A380s on order with 3 options, for a total of 13. Not sure where you got the 6 from.
@ Alex -- They have four in their fleet, six on order, and three options. It's going to be a while before they'd get the options, so buying four to six quickly seems like a good option.
I wouldn't be surprised if Emirates would write a $2.4 billion cheque. Qatar Airways simply doesn't have enough passengers to fill up these whales. I simply cannot understand who flies on Qatar or on Etihad because unless you live there it's just not pleasant to fly to Doha or to Abu Dhabi for a connection while Emirates is in Dubai with better service in a better city with better airport. Qatar doesn't even have First class on most of their planes.
I wouldn't surprise to see if they lease planes to Turkish airlines. Turkish airlines are doing very well in Chinese market but couldn't add more flights because of slot restriction. Also, Chinese customers really love A380, they will actually pay more money for flying on A380.
Kangaroo routes have too many A380s consider the population of Australia. Transpacific routes are also quite competitive given US airlines almost dominated the transpacific market. (Delta and United...
I wouldn't surprise to see if they lease planes to Turkish airlines. Turkish airlines are doing very well in Chinese market but couldn't add more flights because of slot restriction. Also, Chinese customers really love A380, they will actually pay more money for flying on A380.
Kangaroo routes have too many A380s consider the population of Australia. Transpacific routes are also quite competitive given US airlines almost dominated the transpacific market. (Delta and United have hubs in Tokyo and even fly lots of inner Asia routes)
The only market I see has potential to grow is Asia - Africa, Latin America. Currently, these routes are mostly served by ME3. But Istanbul is definetly a better connection point.
I've got an AA Mileage ticket booked on MH from KUL to CDG in F in mid November. Perhaps I should look at changing that over to Cathay...
Not good for oneworld who is already weak in Asia.
BA is stingy with F seats you will end up in J or have to cancel
Perhaps Air Koryo is up to it? :)
@H I hear as soon as feasible. When is your flight? They might reroute you on BA LHR-KUL or CDG-LHR-KUL
Any idea on timing, or the soonest that 380s could leave the fleet? I have a redemption coming up in F... :S
To the best of my knowledge, all their A380 routes are money losers, especially London where I believe they do two flights per day. They don't attract much inbound traffic from these flights when the likes of BA/AF fly the same routes, and the outbound demand isn't there. Airbus will probably help with the reconfig costs if they want to keep their flagship aircraft from taking up all this storage space; they already have two...
To the best of my knowledge, all their A380 routes are money losers, especially London where I believe they do two flights per day. They don't attract much inbound traffic from these flights when the likes of BA/AF fly the same routes, and the outbound demand isn't there. Airbus will probably help with the reconfig costs if they want to keep their flagship aircraft from taking up all this storage space; they already have two whitetails in Toulouse that Skymark cancelled on. MAS is going to be a very different airline in a few years than the one it is now..
Just read the restructuring plan and you will see that the intention is to become a regional carrier. All (or nearly all) longhauls will be with partners..... So they don't really need or want the A380's.
@ Gerard -- Just don't see how that will end in practice. They can't compete on shorthaul, let alone longhaul.
I would say that bones of F and Y seats on the MH A380 is more or less ready to go especially for QR that use something similar. The problem is J that MH has configured in a 2-2-2 config, that would have to go.
I could see Emirates showing interest. They love A380s.
Qatar Airways would be a good bet.
But as Lantean asks, I would be curious too to know how much it would cost to do a complete retrofit + repainting of an A380 (or six).
if Qatar or Etihad were to buy them, how much does it cost to completely retrofit an A380? maybe they would leave coach as is... but the rest would have to be gutted, no?