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KUALA LUMPUR - Malaysia Aviation Group (MAG), parent of national carrier Malaysia Airlines, said on Tuesday it would take delivery of Boeing 737 MAX jets from 2024, though the airline group plans to retire its Airbus A380 fleet in the coming months.
The company has agreed with Boeing to take delivery of its orders from 2024, over a course of three to four years, Group Chief Executive Captain Izham Ismail said in a virtual press briefing.
"We're committed to take the MAX's delivery in 2024, but we are also exploring the possibility of taking it earlier," Izham said, adding that he hopes issues regarding the 737 MAX would be resolved by then and consumer confidence gets restored soon.
MAG was originally scheduled to take delivery last July, but the 737 MAX was grounded worldwide after two crashes, and several airlines and lessors cancelled orders of the jet.
MAG is also exploring ways to dispose of its Airbus SE AIR.PA A380 fleet, although it has yet to present a proposal to its board.
"We are cognizant of the challenges to sell this aeroplane, but we are still looking at ways and means to dispose of our 380 fleet. At the moment, the management is convinced that the 380 doesn't fit the future plan," he said, referring to the Airbus aircraft.
The airline group is restrategising its business to position itself as a global travel group, becoming a "one-stop centre for all travel needs" and expanding beyond the airline business.
MAG expects its non-flying revenue to accelerate by 60% to 4 billion ringgit ($972 million) by 2025.
Under the debt restructuring process, MAG said it secured savings in liabilities worth 15 billion ringgit, and conserved 4.2 billion ringgit through network cuts and cost saving.
The group forecasts capacity at about 63% of pre-crisis level by the end of this year, Izham said, adding that it expects to break-even and become cash flow-positive in 2023.
The group will also invest the bulk of a capital injection of 3.6 billion ringgit from its largest shareholder Khazanah Nasional into the airline's growth, including its digital business, maintenance, repair, overhaul and aircraft deliveries, Izham said.
Malaysian sovereign wealth fund Khazanah announced in February that it had committed new capital to the airline group to fund the business through until 2025, after the airline had a court approval for its restructuring scheme.
The group said it would look to reinforce its Asia-Pacific network through joint business partnerships with other airlines.
"Japan is key for us. That gives us and reinforces the flows into Japan and we'll be looking to see which other airlines we can partner with," group Chief Strategy Officer Bryan Foong said, adding that European destinations will be considered in 2025 or later.
($1 = 4.1140 ringgit)
(Reporting by Liz Lee; Editing by Sherry Jacob-Phillips and Gerry Doyle) ((ananthalakshmi.as@thomsonreuters.com; Twitter: @AnanthalakshmiA;))