A QUESTION OF BUSINESS | Among Prime Minister Najib Razak’s puzzling announcements in his much-heralded meeting with US President Donald Trump was that Malaysia would spend US$10 billion, or a massive RM43 billion, purchasing passenger aircraft from US’ Boeing.

Flanked by top advisers in the Cabinet Room, Najib told Trump that Malaysia Airlines would buy 25 Boeing 737 jets and eight 787 Dreamliners, and would probably add another 25 737s in the near future – a deal he said would be worth more than US$10 billion within five years.

These came as a bolt from the blue as the purchase of the eight 787s is something which Malaysia Airlines Bhd, the government’s wholly-owned airline through Khazanah Nasional Bhd, has not announced before while the airline is actually in the process of cutting down on its narrow-bodied 737 fleet.

It is still making losses while it maintains it will turn around to profit in 2018. Reports put the loss at over RM450 million in 2016, at a time when airlines worldwide were making money.

According to the International Air Transport Association, airline industry profits reached a cyclical peak in 2016 of US$35.6 billion (US$153 billion), and is still strong at an estimated US$31.4 billion (RM135 billion) for 2017, expected to be the eighth year in a row of aggregate airline profitability.

That Malaysia Airlines is making large losses at a time when many airlines are making good or even record profits does not bode too well for the company. Contrast with low-cost leader AirAsia which made a net profit of over RM2 billion for 2016, up from RM541 million in 2015.

Over the past few years, Malaysia Airlines has been scaling back operations under an RM6 billion rationalisation programme which saw it cut back many routes and mothball some of its existing aircraft while laying off thousands of staff.

Its chief executive Peter Bellew even told Reuters in April that its six Airbus 380s, the largest passenger aircraft in the world, are being put into a new airline that will use it to fly passengers undertaking the Muslim pilgrimages of haj and umrah.

The news agency reported that Malaysia Airlines has been trying to find a use for its A380s since it failed to sell them. The airline previously said the A380s do not make economic sense at a time when it is cutting costs...