MAS, Firefly thrashing out ownership issues on 40 aircraft

by **hlk** Tue 13 Mar 2012, 18:18

GEORGE TOWN: Ownership issues on some 40 narrow-bodied aircraft used by Malaysia Airlines and its subsidiary Firefly are currently being negotiated, prior to the launch of the national carrier's new short-haul premium airline.

Business Times has learnt that the two carriers are currently talking about which party or parties will take ownership of the Boeing 737-800 and ageing Boeing 737-400.

There are currently some 40 narrow-bodied planes of which eight (of the Boeing 737-800) and two Boeing 737-400 belong to Firefly.

The rest of these fleet belong to Khazanah Nasional Bhd's subsidiary, Penerbangan Malaysia Bhd (MAS' holding company), which in turn leases the aircraft to MAS.

"Ownership issues need to be resolved first, over which party takes over the 40 narrow-bodied aircraft for the new airline," a source said.

Another source said that also being negotiated is whether the new airline will apply for a fresh air operator's certificate (AOC) or use the one belonging to Firefly.

(AOC is an approval granted from any national aviation authority to an aircraft operator to allow it to use planes for commercial purposes.)

In Malaysia, AOCs have so far been granted to Malaysia Airlines, AirAsia, MASWings, Firefly and Berjaya Air.

Once the new airline takes off, aviation watchers are expecting Firefly to reinstate its Sabah and Sarawak routes which it

The airline at the beginning of 2011, had expanded its network and operations by using the Boeing 737-800 jets to cities like Kota Kinabalu, Kuching and Sandakan where it had recorded very high load factors.

Following an announcement last August that Malaysia Airlines and rival AirAsia will swap shares in a partnership, MAS announced that Firefly would cease all jet operations by December 4. The national carrier also confirmed that it will absorb Firefly's jet fleet.

It is also learnt that Firely's plans to expand its fleet of turbo-propeller planes and may turn to Canadian aircraft maker Bombardier as its choice of aircraft.