New Delhi, 16 August 2022: The Malaysia Aviation Group (“MAG” or “the Group”) today signed Memorandums of Understanding (MoU) with Airbus, Rolls-Royce and Avolon for the acquisition of 20 new Airbus 330-900 (A330neo) aircraft powered by Rolls-Royce Trent 7000 engines. A total of 10 aircraft are directly purchased from Airbus with a back-to-back sale and leaseback arrangement with Avolon, while the remaining 10 are leased directly from Avolon.
The A330neo will replace the Group’s existing A330ceo fleet and upon delivery, will gradually operate in its existing network throughout Asia, Oceania, and the Middle East.
The transaction includes 20 A330neo purchase rights to provide flexibility for the Group to realise future growth opportunities. The MoU also includes the purchase of spare Trent 7000 engines and engine maintenance services from the Rolls-Royce TotalCare Agreement. The aircraft are scheduled to be delivered to MAG starting from the third quarter of 2024 through to 2028.
Further to the renewal of the widebody fleet, the Group also announced at the event graced by Datuk Seri Ir Dr. Wee Ka Siong, Minister of Transport Malaysia that it is working on a wider collaboration with Airbus Group in Malaysia in the areas of sustainable aviation (including sustainable fuel), aviation training, airspace management and aircraft maintenance.
Izham Ismail, Group Chief Executive Officer of MAG, said, “After an extensive technical evaluation, and a very competitive process, we are delighted to have reached a strategic agreement with our partners on the renewal of our widebody fleet through the acquisition of 20 A330neos. The innovative, cost effective, successful tripartite approach offers a holistic solution to fleet owners that is financially viable for MAG as we secure a lower and stable cost base, and with assurance of support financing.
The acquisition of the A330neos is a natural transition from our current A330ceos fleet, but the A330neo will not only provide modernisation to our fleet and enhanced operational efficiency, but also meet environmental targets through reduced fuel-burn per seat while keeping passenger safety and comfort at its core. This is a significant milestone as the Group moves ahead towards the successful execution of our Long-Term Business Plan 2.0 to position itself as a leading aviation services Group within the region.”
MAG currently owns a fleet size of 106 aircraft system-wide, of which there are 24 A330s – six A330-200s, 15 A330-300s and three A330Fs, utilised by airlines under the Group, Malaysia Airlines and AMAL by Malaysia Airlines as well as its cargo arm, MABkargo. The A330 first entered service with Malaysia Airlines
in 1995 and has become a proven and popular choice with passengers flying on its Asia-Pacific route network.
Christian Scherer, Chief Commercial Officer and Head of International at Airbus, said, “Malaysia Airlines is one of the great Asian carriers and we are proud to be its preferred supplier of widebody aircraft. The decision by the airline is a clear endorsement of the A330neo as the most efficient option in this size category for premium operations. It’s also the clear winner in terms of in-flight comfort and we are looking forward to working with MAG to define an exceptional cabin.”
The A330neo is the new generation version of the popular A330 widebody, which incorporates the latest generation engines, a new wing and a range of aerodynamic innovations. The aircraft offers up to 25% reduction in fuel consumption and emissions and is capable of flying 7,200 nm or 13,300 km non-stop. Seating capacity for the Group’s A330neo will consist of 300 seats within two cabin classes (Business and Economy).
Ewen McDonald, Chief Customer Officer of Rolls-Royce Civil Aerospace, said: “We are delighted that MAG has selected the Trent 7000 powered Airbus A330neo for their future fleet. With excellent fuel burn performance and great reliability, the Trent 7000 is the perfect choice to support the airline’s growth aspirations. We are also incredibly proud to provide their fleet with reliable and predictable maintenance services under our TotalCare package, and look forward to working closely with them in the future.”
The Trent 7000, which first entered service in November 2018, is the latest engine in the Trent family. Benefitting from the highest bypass ratio of any Trent engine, the Trent 7000 offers a 14 per cent fuel burn improvement per seat compared to its predecessor and will significantly reduce aircraft noise. It is already certified to operate on a fifty per cent blend of Sustainable Aviation Fuels (SAF).
As Rolls-Royce’s flagship service offering, TotalCare covers off-wing repair and overhaul and is designed to provide operational certainty for customers by transferring time on wing and maintenance cost risk back to Rolls-Royce.
Andy Cronin, Avolon Chief Executive Designate, commented: “Today’s announcement builds on our longstanding relationships with industry leaders such as MAG, Airbus and Rolls-Royce, and we are delighted to partner with them to deliver a unique portfolio solution that will support MAG’s operations and business growth. As the Asian aviation market continues to emerge from the pandemic, this A330neo transaction will help MAG renew its fleet and position them to capitalise on market recovery. The enhanced fuel-efficiency and performance, as well as the unit cost improvements of the A330neo compared to older generation aircraft, will allow MAG to meet the growing demand for air travel in the region – further strengthening their position as one of the leading carriers of choice in the Asia Pacific market.
As previously disclosed, we are experiencing a rapid recovery in demand for our orderbook slots for both our single and twin-aisle new technology aircraft, and we are delighted to partner with MAG on this milestone transaction.”
MAG exclusive financial and fleet advisory for the fleet acquisition, Seabury Securities LLC Managing Director & Partner, Alexis Fekete commented, “We are proud to have supported MAG in this very
competitive selection process, we believe the comprehensive solution brought by Airbus, Rolls-Royce and Avolon offers a cost-effective replacement of the current A330ceo fleet which lay a solid foundation for the airline’s future regional operations.”
Seabury Securities LLC was MAG’s exclusive financial and fleet advisor for the fleet acquisition and financing.