Westjet’s Full Year Profit Falls 20 Percent

[In The News]

Canada's WestJet Airlines reported fourth quarter and full-year results showing a net profit fall of almost 20 percent for the year.

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[Guest]

Any news re WestJet and widebodies?  It seems that the used widebody market is becoming active. 

Malaysia Airlines Targets More Used Widebody Aircraft

Mar 1, 2017Adrian Schofield | Aviation DailyIN

 

 

Malaysia Airlines Berhad (MAB) has increased the number of used widebody aircraft it is seeking to add to its fleet to meet medium-term capacity needs.

The carrier is in discussions with potential sellers and lessors regarding 6–7 aircraft it intends to introduce in 2018, and a similar number in 2019, CEO Peter Bellew told Aviation Daily. As recently as November, Bellew said MAB was looking to add a total of five aircraft.

Bellew said MAB has a wide range of offers on the table. With many airlines grounding aircraft, the used market “has opened up quite significantly” and prices have dropped further in recent months, he said.

MAB will probably “zero in” on a deal sometime during the current quarter, Bellew said. However, he emphasized the airline will only do such a transaction “if the price is right.” The carrier is likely to target A330s, as it currently operates this type in its widebody aircraft fleet.

Bellew said some of the incoming widebody aircraft could replace narrowbody aircraft on routes where capacity is not meeting demand. Because of that, the addition of widebody aircraft “might be counterbalanced by a reduction in the narrowbody [aircraft] fleet,” and the overall fleet size would not increase much over the next 2–3 years.

MAB is also engaged in talks with Boeing and Airbus regarding its longer-term widebody aircraft needs, Bellew said. The airline is considering an order for about 25 aircraft, and is most interested in the Boeing 787-9s or A330neos. However, he stressed that there is no urgency to make a deal, and the prices being offered are still not low enough to make sense for MAB.

The airline currently has six A350s on order, which it primarily intends to use to replace its fleet of six A380s on routes from Kuala Lumpur to London. The first deliveries of the A350s have been delayed by 1–2 months, and are now expected in December. MAB will likely receive two A350s before the end of December, Bellew said. He admits the delays are annoying because December is one of the carrier’s busiest months, and the airline would have liked to have some A350s operational by then.

The carrier is making good progress with its plans to establish a separate leasing company to take over its A380s, Bellew said. The name and branding for the unit are likely to be announced in a matter of months, and staff hiring is underway. Final interviews are being conducted for CEO candidates. MAB is also discussing modifications with Airbus that would increase A380 seat capacity to 720 per aircraft.

MAB released some details of its financial performance for the fourth quarter and full-year 2016. Because it is owned by a state agency, the carrier does not give detailed earnings reports.

The airline achieved a net profit for the month of December, and Bellew said the fourth quarter also was profitable. Load factor was up 11 points to 81% for the quarter. MAB is making progress on cutting its deficit, and the loss for the full year was 49% smaller than the airline’s expectations. Average fare was down 3% in the fourth quarter, and costs excluding fuel were reduced by 2%.

Bellew signaled that Malaysia Airlines will not be making any changes to its name. MAB’s strong load factors highlight that the carrier has “a very solid brand,” Bellew said. Although there previously was some debate about whether the brand and airline name needed to be changed, this issue has “been put to bed,” he said.

MAB expects to face headwinds this year from a weak local currency and increasing competitive capacity in its markets. While Malaysian LCCs AirAsia and Malindo Air are expanding, MAB will “let them battle it out” for the low-fare market segment, Bellew said.

AirAsia X is believed to be planning to launch flights to London this year, which would compete with MAB’s double-daily A380 service. Bellew noted that MAB will “aggressively defend its share” of the London market.