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REFILE-UPDATE 2 INTERVIEW-Malaysia Airlines offers to lease A330s from Alitalia
April 26, 2017 / 1:57 PM / 5 months ago

REFILE-UPDATE 2 INTERVIEW-Malaysia Airlines offers to lease A330s from Alitalia

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By Alexander Cornwell

DUBAI, April 26 (Reuters) - Malaysia Airlines has offered to lease Airbus A330 jets from Alitalia if the struggling Italian airline is wound up, the Asian carrier’s chief executive said on Wednesday.

Alitalia is preparing for special administration proceedings after workers rejected its latest rescue plan, making it impossible for the loss-making airline to secure funds to keep its aircraft flying. Workers are hoping the Italian government will step in with an alternative rescue deal.

Malaysia Airlines could take between six and eight Airbus A330s from Alitalia, CEO Peter Bellew told Reuters in Dubai.

“I hope Alitalia stays in business but it doesn’t look good to me today. I think it’s hard to see how they are going come back from the pressure they are sitting on at the moment,” he said.

An Alitalia spokesman declined to comment.

Malaysia Airlines is emerging from a turnaround after suffering two tragedies in 2014, when flight MH370 from Kuala Lumpur to Beijing disappeared in what remains a mystery, and then flight MH17 from Amsterdam to Kuala Lumpur was shot down over eastern Ukraine.

Its load factors - or how full its planes are - averaged around 80 percent in the three months to March 31, Bellew said.

Malaysia Airlines wants to lease between six and eight A330s or Boeing 777s for use from 2018 and a further seven to nine from 2019, he said, expecting to finalise most of those deals in the next four to six weeks.

This is an increase on the six for 2018 and six for 2019 he told Reuters last month he was interested in.

“The world really is awash right now” Bellew said with regard to spare widebody aircraft, adding that he also saw opportunities to take aircraft from Middle East carriers.

“There are really good deals out there at the moment. It’s a buyer’s market right now.”

Bellew also said he planned to make a decision on an order for 30-35 new Airbus A330neo or Boeing 787-9 widebody planes in the next four to six months to replace existing aircraft in its fleet from the end of 2019.

“If the prices are good ... we will do an order,” he said. “But they need to sharpen their pencils because they are still unrealistic with the pricing in the current market.”

Malaysia Airlines would look for more leases if it doesn’t get the pricing it wants, he said.

It could also convert or add to an existing order for 25 of Boeing’s new generation 737 MAX 8 narrowbody aircraft or the proposed bigger MAX 10 version currently being offered informally to the market by the U.S. planemaker.

Bellew did not say how many could be ordered or when a decision might be made.

Industry sources said on Tuesday that Boeing was nearing a decision to launch the MAX 10 plane at the Paris Airshow in June.

Malaysia Airlines plans to trim its narrowbody fleet to between 35 and 40 aircraft from 54 currently and increase its number of widebodies from 15 to 35.

The airline is aiming for a return to profitability by 2018 and stock market listing in March the following year.

Bellew said he believed a majority of the airline would be listed. (Reporting by Alexander Cornwell in Dubai; Additional reporting by Agnieszka Flak in Milan; Editing by Mark Potter, Greg Mahlich)

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