6 days ago
Boeing aircraft deal driven by demand, strategic interest, says Anwar
KUALA LUMPUR: Malaysia has been engaging with China and Brazil over aircraft procurement, even as the country proceeds with plans to acquire Boeing planes, says Prime Minister Datuk Seri Anwar Ibrahim.
He explained that Malaysia Aviation Group (MAG), the parent company of Malaysia Airlines, had made the procurement decision after a period of financial recovery.
"The aircraft needed to be purchased. Since 2004, this is the first time Malaysia Airlines has recorded a profit after years of losses – a turnaround made possible through transparent and efficient management, free of political interference,' he said in the Dewan Rakyat on Tuesday (Aug 5).
He noted that large-body aircraft orders were also placed with Airbus last year, and Malaysia had ongoing negotiations with aircraft manufacturers in Brazil and China.
However, planes from China are intended solely for domestic use in China, while Brazil has yet to deliver despite an earlier order.
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Anwar stressed that Malaysia's agreements with Boeing come with specific requirements.
'Our condition with Boeing is that part of the aircraft production must be done locally. In fact, both Boeing and Airbus already have significant manufacturing operations here. For instance, Airbus wings are produced in Negri Sembilan, Kulim and Selangor. The same goes for Boeing components," he said in the Dewan Rakyat on Tuesday (Aug 5).
He added that demand is rising rapidly for routes to India, China and Japan, requiring MAS to ramp up its fleet capacity.
'If we support the private sector like AirAsia, why can't we do the same for Malaysia Airline?' he added.
Anwar dismissed criticism that the government is favouring Boeing or the United States.
'I wouldn't agree to any deal unless it is competitively priced. We also buy from Airbus. In fact, I raised this directly with President Macron — both Malaysia Airline and AirAsia will be acquiring larger aircraft.
'This is about striking a balance. During my visit with the Sarawak Premier to meet Indonesia's Prabowo, we discussed new export routes via Sarawak. These are practical steps,' he added.
Earlier, Investment, Trade, and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz stated that MAG's aircraft purchase is valued at US$19bill and aims to replace aging B737-800 planes that have been in operation for an average of 14 years.
By adopting such an approach, Malaysia proved to the US that 'we, too, are significant buyers of their products, which convinced them to reduce the tariffs to 19% from the previous 25%,' he said.
In March, MAG announced it had ordered 18 Boeing 737-8 and 12 Boeing 737-10 aircraft, to be delivered by 2030, and placed an option to buy 30 more 737 aircraft.
Orders for hundreds of Boeing jets have been announced over the past week in deals with Japan, the United Arab Emirates, Indonesia, Cambodia, Bangladesh, and other countries as part of negotiations to reduce US tariffs.
Tengku Zafrul denied that government funds were being used to purchase the planes. He stated that MAG would buy the planes using its own funds.
