Malaysia Airlines to buy up to 25 new Airbus planes, sell new shares to raise $778 million

The Associated Press ~ staff The News
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KUALA LUMPUR, Malaysia - National carrier Malaysia Airlines said Tuesday it would buy up to 25 new Airbus A330-300 planes and sell new shares to raise 2.67 billion ringgit (US$778 million) to fund the fleet expansion.
The airline inked a pact with Airbus for a firm order of 15 of the wide-bodied aircraft, with an option for another 10 planes. The 25 planes have a list price of $5 billion, it said, although airlines typically get discounts for bulk purchases.
Malaysia Airlines Chief Executive Azmil Zahruddin said the carrier will fund the purchases through a combination of the share issue and borrowings.
The airline will offer existing shareholders some 1.671 billion new shares to raise 2.67 billion ringgit as it prepares to capitalize on the economic recovery from next year, he said.
Azmil said the A330 planes will be delivered from 2011 to 2016, and used to serve the growing markets of South and North Asia, China, Australia and the Middle East. The A330-300 will complement the carrier's incoming fleet of six A380 superjumbos and 35 Boeing B737-800 narrow-body jets, he said.
"By 2016, all the aircraft we have ordered will be in and we expect to have one of the youngest, most fuel efficient and environmentally friendly fleet in Asia," Azmil said. "The new fleet will create a platform for us to profitably grow."
The A380 will serve key long haul destinations such as London and Sydney, the A330 will fly medium haul destinations while the B737-800 will be used on domestic and regional routes.
Azmil said the airline expects to gain annual savings of 300 million ringgit ($88 million) from lower operating costs when the 15 A330 planes are received.
Malaysia Airlines has said it expects global travel to pick up by late next year.
The International Air Transport Association has predicted global airline losses will swell to $11 billion this year. It predicted a 2010 loss of $3.8 billion, and doesn't expect the industry to turn a profit until 2011 at the earliest.

Organizations: Malaysia Airlines, Airbus, International Air Transport Association

Geographic location: KUALA LUMPUR, Malaysia, South and North Asia China Australia Middle East Asia London Sydney

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