This article first appeared in The Edge Malaysia Weekly on November 24, 2025 - November 30, 2025

MALAYSIA Aviation Group Bhd (MAG), the parent company of national carrier Malaysia Airlines Bhd, is weighing several options, including a bond sale, to fund new aircraft orders as it ramps up its fleet. The group had deferred fleet investment in recent years to focus on cutting debt and strengthening its balance sheet, a move that contributed to issues with its aircraft last year.

Outgoing group managing director Datuk Captain Izham Ismail says the airline group has identified three main options to meet its financing needs: sale and leaseback, finance lease and tapping the capital market through instruments such as perpetual bonds.

“We have started the ‘campaign’ of appointing a broker to help determine how we should fund these new planes. We will go to the market to assess the appetite, as there are still many moving parts. For example, if we opt for a finance lease, what will the interest rate be? If we choose a sale-and-leaseback arrangement, is there a lessor interested in buying from us?

“Currently, we are open to all three options,” Izham tells The Edge, noting the final approach will likely be a combination of the three. 

“It could be a certain percentage under sale and leaseback, a certain percentage on finance lease and a certain percentage from the capital market. We are in no rush as we have until late 2026 to make a decision.”

Crucially, Izham stresses that the funding will be independent of government support. “At the end of the day, it’s not a one-person decision. It involves the board and the shareholder. But there won’t be any funding from our shareholder Khazanah Nasional Bhd or the government.”

Fresh from firming up an order for 30 new Boeing 737 MAX jets and exercising its purchase rights for 20 additional Airbus A330neo aircraft, MAG plans to issue a request for proposal (RFP) for the purchase of new long-range widebody aircraft next month.

“We have not decided on the number of aircraft to be purchased. The team is currently assessing the network [destinations] and frequency expansion. Once that is completed, we can determine the number of aircraft required. After issuing the RFP, we will begin negotiations and expect to make a decision sometime in mid-February,” says Izham.

These aircraft will replace MAG’s existing seven A350-900s, which will reach 14 years of age by 2031. “They will enable longer flights and carry more passengers and cargo,” he adds.

Aircraft under consideration include the new-generation A350-1000, 787-9, 787-10 and 777X, with Rolls-Royce’s Trent and GE Aerospace engines as possible options to power the widebody planes.

MAG’s recent order for 30 737 narrow-body jets (18 737-8s and 12 737-10s) builds on an existing order for 25 737-8 aircraft through its operating lease with Air Lease Corp. Under the latest deal, the group also holds the option to buy another 30 737 MAX aircraft.

As for the additional 20 A330neos, these complement its initial 2022 commitment of 20 A330neo aircraft — comprising 10 directly purchased and 10 leased from Avolon — bringing the group’s total A330neo commitment to 40 aircraft.

MAG currently operates a fleet of 119 aircraft across Malaysia Airlines, Firefly, MASwings and MASkargo. 

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