Malaysia Air’s 30 A330neos deal faces price bump

Bloomberg

Malaysia Airlines Bhd. has held discussions with Airbus SE about the purchase of A330neo wide-body jets but has so far been unable to agree a price for the planes.
The carrier is also seeking clarity regarding other aspects of the transaction, including delivery schedules, Chief Executive Officer Peter Bellew said in an interview. There’s no likelihood of an order being placed at this week’s Paris Air Show, and one could take until September at least, he said.
Malaysia Air said in March that it was looking at buying 25 to 30 A330neos or Boeing Co. 787s for delivery between 2019 and 2023, potentially worth more than $7 billion at list prices. Around 15 would replace older aircraft, with the rest for expansion.
“With fuel still relatively low and likely to stabilize at that level second-hand aircraft are also attractive, so the figures need to add up,” Bellew said in the interview. Though the A330neo is an attractive proposition, the 787 isn’t yet out of the running while pricing remains an issue, he added.
The A330neo, featuring upgraded engines from Rolls-Royce Holdings Plc, comes in two sizes advertised at $255 million and $291 million before discounts, while the 787 Dreamliner, a modern composite model, has three variants priced between $230 million and $313 million.
Talks are continuing regarding the lease of up to a dozen current-generation A330s, Bellew said, with half of the planes required in the first half of next year and the rest in 2019. They would mainly replace single-aisle Boeing 737s on medium-haul routes capable of supporting wide-bodies.
The Asian carrier has been in touch with more than a dozen leasing firms and other suppliers about the planes and should reach a decision soon, the CEO said. It’s unlikely that they’ll be sourced from Alitalia SpA, which seems likely to survive a bankruptcy filing amid interest from various parties, he said.
Malaysian is seeking more aircraft after paring its fleet and route network in response to a bookings slump that followed two fatal crashes in 2014.