KUALA LUMPUR: Malaysia Aviation Group (MAG) is looking to fast-track its fleet expansion by securing Boeing aircraft delivery slots vacated by Chinese carriers amid escalating trade tensions between China and the United States.
Group Managing Director Datuk Captain Izham Ismail confirmed ongoing discussions with Boeing, noting that the opportunity could accelerate MAG’s fleet growth, though competition for the aircraft remains fierce.
“We’re speaking with Boeing to potentially take over those slots,” he said. “Everyone wants them—there’s a high demand—so we’re approaching it cautiously.”
The opportunity arose following reports that China had instructed its airlines to halt deliveries from Boeing, forcing the US plane manufacturer to redirect aircraft previously intended for Chinese buyers.
Any additional aircraft acquired under this arrangement would be separate from MAG’s current order of 25 aircraft under lease from Air Lease Corporation (ALC), set to be delivered between 2023 and early 2026.
Izham noted that several key factors must be considered before acquiring new jets, including where the aircraft sits in the production queue and its configuration.
“We need to know whether the aircraft is a green tail (unassigned) or already partially configured,” he explained. “Seat layout, lavatories, and galleys must align with our specifications.”
Strategic Shift in Fleet Composition
According to MAG’s Chief Strategy and Transformation Officer Bryan Foong Chee Yeong, the group is also shifting its long-term fleet strategy to better serve the Asia-Pacific region’s high-traffic routes, particularly in congested ASEAN capitals.
“Currently, we operate a narrowbody Boeing 737 fleet, but by 2035, we’re looking at becoming more widebody-focused,” Foong said. “In congested airports, adding more flight frequency isn’t feasible, so we need larger aircraft to increase capacity.”
MAG also plans to expand or replace its Airbus A350 fleet, with long-term planning extending to 2043.
Financial Prudence and Capital Market Plans
Group Chief Financial Officer Boo Hui Yee said MAG has only drawn RM1.3 billion of the RM3.6 billion capital injection pledged by sole shareholder Khazanah Nasional Bhd, with the remaining funds carefully managed to avoid unnecessary financial burden.
“We’ve maintained a cash-positive position and continue to cover our operational costs,” she said. “We still have approximately RM2.3 billion in reserve. There’s no need to draw more unless required.”
Izham also outlined plans to reduce MAG’s reliance on operating leases, aiming for a balanced fleet ownership model—50 per cent leased, 50 per cent owned. Currently, 80 per cent of MAG’s fleet is leased.
“Leased aircraft come with costly end-of-lease conditions. Owning aircraft provides more control and reduces long-term costs,” he added.
MAG’s efforts to secure vacated Boeing slots, recalibrate its fleet mix, and approach capital markets for expansion funding mark a strategic push to strengthen its regional competitiveness and financial sustainability.–BERNAMA
