Malaysia Airlines is buying the engines from CFM International, a unit of General Electric, and they will power the Boeing 737 MAX 8 aircraft bought in July, according to a Nikkei Asian Review (NAR) report.
The planes were valued at USD2.75 billion based on their list price. Malaysia Airlines had also bought rights to 25 more 737 MAX 8 and 737 MAX 9 airplanes, the report said.
The agreement to seal the deal between Malaysia Airlines and CFM International was signed on Thursday. It was witnessed by Prime Minister Najib Razak.
“We have been very happy with the CFM56-7B engines we operate and believe the new LEAP engine will bring even better operating economics in terms of fuel efficiency with the same reliability we have come to expect from CFM, “said Peter Bellew, Group Managing Director and CEO of Malaysia Airlines.
Malaysia Airlines operates 54 Boeing 737-800s aircraft. The airline retired two older 737-800 aircraft in September. The rest of its passenger fleet extends to 15 Airbus A330-300 and six Airbus A380.
The airline is making the new purchases more than two years into its five-year turnaround programme that aims to achieve profitability by 2017, and relisting in 2020, said the NAR report.
Bloomberg had reported that Malaysia Airlines was in the process of selling its fleet of Airbus A380, a wide-body aircraft that can take over 500 passengers, which will no longer be useful as the company was focusing on regional and Asian destinations including 15 possible new routes to China, South Korea and Japan.
CFM International, the world’s leading supplier of commercial aircraft engines, is a 50:50 joint venture company between General Electric and Safran Aircraft Engines.