Malaysia Airlines Signs MoU with Boeing for 16 Planes

14th Sep 2017

Even though it looked like the deal with Airbus was closer, Malaysia Airlines in the end agreed terms with the US-based aircraft maker Boeing for the delivery of 16 of its aircraft. The Malaysian carrier set terms with Boeing to purchase eight Boeing 787-9 Dreamliners and the same number of Boeing 737 MAX 8 planes to upgrade its busiest domestic and international routes.

The list price for the aircrafts is $3.06 billion, not including discounts.

According to an emailed statement from Boeing on Tuesday, the two sides signed a memorandum of understanding (MoU).

At a recent meeting with the United States President Donald Trump, Malaysian Prime Minister Najib Razak Najib said that MAS could double its order for the 25 single-aisle Boeing 737 MAX 10s in the next five years.

Mr. Najib explained:

There is a strong probability – not possibility – probability that we will add 25 more 737 Max 10 in the near future. So within five years, the deal will be worth beyond $10 billion.” His government will “also try to persuade AirAsia to purchase GE engines

Mr. Trump said:

We’re talking about trade -- very large trade deals. We’re working on one deal where between $10 and $20 billion dollars’ worth of Boeing jets are going to be purchased, General Electric engines will be purchased, and many other things.

The US president and the Malaysian PM also went over some of the differences between the two countries. Malaysia is a member of the trans-Pacific pact, which the United States have exited when Trump came to office. In addition, Malaysia is also leaning towards China and is boosting its investment ties with this country, while it also exports more to the US than it imports from it. Finally, there’s also a criminal probe into the alleged money laundering and embezzlement at an investment fund linked to the Malaysian prime minister that the US Department of Justice is conducting.

In July, Malaysia Airlines Chief Executive Officer Peter Bellew said that the airlines should return to black in the second half of the next year. The carrier suffered two back-to-back air crashes (both with fatal consequences) in 2014 and has since then been taken private by wealth fund Khazanah Nasional Bhd