Visitors take pictures of a model of Boeing's 787 Dreamliner during Japan Aerospace 2016 air show in Tokyo, Japan. -Reuters
Malaysia Airlines will announce a deal to buy eight widebody Boeing (BA.N) 787 jets during the visit of Prime Minister Najib Razak to the United States, two industry sources said on Tuesday. The deal, worth more than $1.8 billion at list prices, is expected to be one of the announcements that will be made after Najib meets with US President Donald Trump on Tuesday, the sources said.
The United States was Malaysia's third-largest trading partner in 2016. The meeting with Trump is critical for Najib, who is looking to raise his standing globally, and in Malaysia, where he is expected to call general elections in the coming months. An international graft probe by the United States and several other nations into state fund 1Malaysia Development Berhad (1MDB) has hurt Najib's popularity. With the US visit, Najib is hoping to put the 1MDB scandal behind him.
Najib is scheduled to witness a memorandum of understanding signing ceremony between Malaysia Airlines and Boeing, according to a schedule of the Prime Minister's events in Washington reported by Malaysian media outlets. The two sources said Malaysia Airlines considered buying Airbus A330neos before settling on the 787 order. Aircraft manufacturers typically give discounts to list prices. Malaysia Airlines said it would not comment on reports that are speculative in nature. Boeing and Airbus declined to comment.
The sources did not want to be named because the discussions were private. Brendan Sobie, chief analyst at independent aviation research firm CAPA Centre for Aviation, said the timing of the order alongside Najib's visit raised concerns of potential political influence over the purchase.
-Reuters, Kuala Lumpur
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