Malaysia Airlines in talks to rent out A380s for pilgrim flights

LONDON (Reuters): Malaysia Airlines is in talks to rent out its A380 superjumbos to religious travel groups for Haj and Umrah pilgrimages, its chief executive said, in a move likely to trim financial losses and dispel some recent gloom over demand for the huge jets.

Malaysia Airlines has six of the world’s biggest jetliners but says the Airbus jet does not make economic sense for it at a time when it is cost-cutting as part of a restructuring. Past attempts to sell the planes have failed.

CEO Peter Bellew said the airline was in talks about a possible “wet lease” deal with a number of religious travel organisations that would hire Malaysia Airlines aircraft and crew to fly people on the Haj and Umrah pilgrimages.

The Haj is an Islamic pilgrimage to Mecca in Saudi Arabia and takes place once a year, with more than one million people travelling by air, while the Umrah pilgrimage can be taken at any time of year.

Talks between Malaysia Airlines and the potential customers started about 10 weeks ago and Bellew, who took the CEO reins from Christoph Mueller in July, said he is confident of reaching an agreement before the end of December and that the planes would be used for eight months a year.

“I believe it will happen,” he told Reuters, adding that any deal would more than cover its A380 costs.

A deal to re-deploy the A380s would be a welcome development for Airbus, which was forced to announce a cut in production of the aircraft because of weak demand for large four-engined jets as airlines fretted about the global economy. 

Many airlines say it is less risky and often cheaper to fly smaller two-engined jets that are easier to fill. 

Though it usually focuses on selling new planes, Airbus is closely involved in trying to kickstart an alternative follow-on market for used A380s because an overhang of unwanted jets would depress resale values and make it even harder to sell new ones.

To ease the transition, Malaysia Airlines is in discussions with Airbus about reconfiguring its A380s, which usually have 544 seats in three classes, to fit 700 people for the pilgrimages. Bellew said Airbus is open to the possibility.

Malaysia Airlines said in February that it had delayed plans to sell some of its A380s, and would now keep all six of them at least until 2018.

But the Kuala Lumpur-based carrier has been struggling since the disappearance of flight MH370 and shooting down of flight MH17 over eastern Ukraine, both in 2014.

The airline was taken private by state fund Khazanah Nasional Bhd after the disasters as part of a turnaround plan to shrink its network and cut its costs to try to return it to profitability by 2018.

Bad winter delays MH370 search by up to two months, say authorities

SYDNEY (Reuters): An undersea search for missing Malaysia Airlines flight MH370 will be delayed by up to two months because of bad weather in the Indian Ocean during the southern winter, authorities said last week.

The Boeing 777 disappeared on its way from Kuala Lumpur to Beijing in March 2014 with 239 passengers and crew on board, sparking a two-and-a-half year search that has focused on the Indian Ocean.

Authorities from Malaysia, Australia and China initially expected to finish searching a 120,000-square-km (46,000 square mile) target area by the end of 2016.

“Due to poor weather conditions over the Southern hemisphere winter, it is expected searching the entire ... area will be completed by around January/February 2017,” they said in a statement.

In what has been the most expensive search in aviation history, the authorities said they had searched 110,000 square km (42,500 square miles) to date.

The search will be suspended once the target area is scoured, pending new information.

Why the aircraft went off course and came down are a mystery.

The only confirmed traces of the plane have been three pieces of debris found washed up on the island country Mauritius, the French island Reunion and an island off the coast of Tanzania.