Boeing Poised for Multibillion-Dollar Jet Deal With Malaysia Air
(Bloomberg) -- Malaysia Airlines Bhd. is closing in on a multibillion-dollar order for Boeing Co. 787 Dreamliners, 737 Max 10 jets and General Electric Co. engines, Malaysian Prime Minister Najib Razak said.
The Malaysian flag carrier plans to order eight of Boeing’s carbon-composite Dreamliners, and possibly double its order for 25 of the single-aisle Max over the next five years, Najib said at a meeting with U.S. President Donald Trump at the White House on Tuesday. A tentative pact could be announced as early as this evening, according to people familiar with its plans.
“We’re talking about trade -- very large trade deals,” Trump said. “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 agreement would mark a victory for Boeing in a competition that had been viewed as favoring rival Airbus SE. Malaysia had been in talks for the European planemaker’s A330neo wide-body jets but had been unable to reach a deal on price, Chief Executive Officer Peter Bellew said in an interview in June.
Najib said 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,” the prime minister said.
Najib also pledged that a Malaysian pension fund would invest $3 billion to $4 billion to support “infrastructure redevelopment” in the U.S.
Malaysia Air, taken private by the nation’s sovereign wealth fund Khazanah Nasional Bhd., has been trying to win back customers following two fatal air crashes in 2014. The carrier, on track to become profitable next year, has been adding more services in Asia after cutting jobs and unprofitable long-haul routes to keep the business afloat.
The airline leased six Airbus A350s from Air Lease Corp. to offer flights to London next year. It has also ordered 737 Max 9 and Max 10 aircraft from Boeing with deliveries expected in 2019 and 2021, respectively.
The company should be cash-positive in the second half of 2018, Bellew said in July. China, India, Japan and Taiwan are its growth markets, and the airline will add more routes to these destinations over the next few years, he said.