Airbus A380 gets lifeline with plan for 700-seat Hajj carrier
- IL&FS Transportation JV plans Rs890 crore bond issue to refinance debt
- Travis Kalanick needs to explain role in Uber’s data breach
- UP civic elections 2017 LIVE: Voting begins for first phase in 24 districts
- US congratulates Dalveer Bhandari, but ‘opposes’ expansion of UNSC veto
- Sajjan Jindal’s JSW Groups said to hire StanChart banker to lead M&A
London: Malaysia Airlines Bhd. said it will use six surplus Airbus Group SE A380 superjumbos to form the core of a fleet of 700-seat jets dedicated to transporting Muslim travellers on the annual Hajj pilgrimage to Mecca.
Peter Bellew, the airline’s chief executive officer, met with Airbus’s senior management in Toulouse, France, on Wednesday to hammer out details of the plan, he said in an interview, adding that the meetings were “very positive.”
Establishing a religious-charter operation is attractive because it would offer guaranteed revenues and predictable fares, passenger numbers and plane requirements, according to the CEO, who also looked at selling the A380s to Chinese airlines. The week-long Hajj and year-round Umrah pilgrimage could employ 20 superjumbos within five years and Bellew said the business might also tap further aircraft coming off lease or unwanted by other airlines.
Airbus has been seeking to broaden the A380’s appeal as orders from new operators dry up, and is keen to establish the jet’s credentials as a mass-market workhorse rather than a just a fleet flagship. Bellew said the Hajj unit would be established as a standalone business potentially open to investment from manufacturers, while declining to say if Airbus planned to take a stake.
“This is a huge, huge global movement of people,” Bellew said. “We’ve done a lot of homework and the figures are adding up.” The operation could be given a name and formally launched before the end of the year, he said.
While airlines including Saudi Arabian Airlines, which leases-in dozens of jets to cater to the 2 million people who journey to Islam’s holiest city during the Hajj each year, and PT Garuda Indonesia, the biggest airline in the world’s largest Muslim country, have said they could use the A380 for pilgrimage flights, their plans have yet to come to fruition.
Shukor Yusof, founder of aviation consultancy firm Endau Analytics in Malaysia, said it may be that the companies decided the A380 wasn’t the right plane for the Hajj, adding that Bellew’s decision not to sell his six planes suggests there is “no secondary market.”
Malaysia Air, which has a full-flight simulator for the A380 and a hangar able to accommodate three of the planes at a time, no longer needs the double-decker as it switches to smaller Airbus A350 wide-bodies and focuses more on Asian markets.
Planes used for the Hajj would be modified from their current 494-seat layout with Malaysia Air to accommodate 700 people in a single class, giving them the densest configuration of any superjumbo. Indian Ocean airline Air Austral last year scrapped its order for two planes it had planned to fit with 840 seats apiece and most operators stick to about 500, though Dubai-based Emirates, the biggest customer, has begun flights with a 615-berth version.
At least some of the Malaysian planes would be equipped to allow conversion when required to a lower 604-seat setup featuring business berths and better suited to the Umrah, which is not compulsory for Muslims and generally a more relaxed trip for participants, Bellew said, adding that the switch between seating patterns would take no more than a week.
The aircraft would operate for other airlines or national governments on a so-called wet-lease basis, with pilots, cabin crew and associated services provided, the executive said. Potential markets range from Malaysia itself, where 60% of the population is Muslim, through Indonesia, China, Bangladesh, India, Arab north Africa and even the UK, he said.
The deployment of newer models on pilgrimage flights is likely to become mandatory as Saudi Arabia moves toward banning aircraft that are more than 20 years old for both Hajj and Umrah services, the executive said. Malaysia Air recently carried out heavy maintenance checks on its four-year-old A380s and found them to be in near-perfect condition, Bellew said, speculating that the model could have a lifespan of 50 years, “like the Boeing 707.”
Outside of the religious-charter market, the A380s could substitute for other large wide-bodies, such as other superjumbos and Boeing Co. 777s and 747s, when they are undergoing maintenance checks that can take three or four months, he said.
The business would most likely be established as a separate entity under Malaysian ownership and with a local air operator’s certificate, the CEO said. Manufacturers have expressed an interest in participating in the new entity on an equity or risk-sharing basis, while other governments could even take an ownership, he said. Bloomberg
--With assistance from Kyunghee Park.