NEWS
10/04/2018 10:17 SAST | Updated 10/04/2018 10:17 SAST

Malaysia Airlines Launches New Tender Process For Jets In Wake Of MH370 Disappearance

The airline has been trying to transform its operations and return to profitability.

Bloomberg via Getty Images

Malaysia Airlines has launched a fresh tender process for 20 to 30 widebody jets that could supersede a deal with Boeing agreed during a high-profile U.S. visit by the country's prime minister last year, a source with knowledge of the matter has said.

The airline has been trying to transform its operations and return to profitability as it recovers from two tragedies in 2014, when flight MH370 disappeared in what remains a mystery and flight MH17 was shot down over eastern Ukraine.

READ: The Search For MH370 Has Finally Been Called Off After Nearly Three Years

Its non-binding initial agreement with U.S. firm Boeing to buy eight long-range 787 jets, valued at $2.25-billion at list prices, came as a surprise given that the national carrier already had an all-Airbus SE widebody fleet.

While the Boeing 787 is included in the airline's latest request for information, it has also listed the Airbus A330neo and A350 for consideration, the source with knowledge of the new widebody tender process told Reuters on condition of anonymity.

The carrier already has A330s and A350s in its fleet.

A spokesperson from European firm Airbus declined to comment.

A Malaysia Airlines spokesperson said it was "premature" to comment on whether or not it planned to firm up the Boeing deal.

MOHD RASFAN via Getty Images

"As an airline, we constantly engage with our partners to review scenarios and options with respect to our network and fleet as a matter of course," she said. "Malaysia Airlines will update once something material develops."

Boeing senior vice-president for Asia-Pacific and India sales Dinesh Keskar told members of the media last month that it was up to the government and the airline to take the lead on firming up the Boeing 787 deal.

A Boeing spokesperson declined to comment further.

The provisional Boeing deal was announced during Malaysian Prime Minister Najib Razak's visit to the U.S. in September.

The visit, ahead of elections in Malaysia in 2018, was important for Najib as a way to show he was welcome at the White House despite a criminal probe by the U.S. justice department into a fund called 1Malaysia Development Berhad (1MDB) that he founded.

U.S. President Donald Trump had praised Malaysia's Boeing deal, but steered clear of the 1MDB probe.

Malaysia's election commission on Tuesday set May 9 as the poll date. Najib announced the dissolution of Parliament on Friday, paving the way for a tough campaign in which he faces off against rival Mahathir Mohamad, who last year questioned the merits of the Boeing deal in a blog post.

The carrier's new chief executive, Izham Ismail, last month said the company had issued a request for information for new generation widebody planes, without specifying the number or model type, with a request for proposal expected to follow.

Previous chief executive Peter Bellew signed the 787 deal.

"They have flexibility to not convert the 787 [initial agreement] to a firm order if they decide it makes sense to go with Airbus for the full requirement," CAPA Centre for Aviation chief analyst Brendan Sobie said.

"It's best if they limit their number of widebody types, as their fleet is not that big to begin with, and having just six or eight aircraft of a particular type is subscale."