FedEx Express is to buy four long-distance MD-11 freighters from Transmile, the strugglingMalaysian cargo airline.
The aircraft, which have been out of service for nearly three years, will be sold for RM 209million ($68 million), the airline said in a Malaysian stock exchange announcement. It hadbeen looking for a buyer for the planes for the last year.
Transmile, which carries express and freight for integrators and freight forwarders and alsooperates regional flights for DHL Express/Air Hong Kong, flew into turbulence in 2008 and 2009 dueto the general slump in freight volumes.
The airline disclosed that the four MD-11s have been parked and idle since April 2008 “as thegroup is unable to identify any viable routes to put the aircraft to service”. The fourplanes are 19-20 years old, it stated.
Transmile said it will use the proceeds to pay off part of its heavy debts, which are put atsome RM529 million. The deal is planned to go through in the second quarter of this year.
The future of the loss-making airline, however, remains uncertain. Some creditors are trying toforce through court orders to wind up the group’s main operating unit, Transmile Air Services(TAS), since they claim that the group has not come up with a valid restructuring plan.
In 2009, the airline’s pre-tax loss increased to RM 271 million from RM 121 million in 2008. Itsrevenues dropped to RM 151 million from RM 293 million. In the nine months ending September 2010,the group’s revenues rose about 50% to RM 156 million but the pre-tax loss escalated to RM130million from RM 58 million.
According to undated information on the Transmile website, the airline has a fleet of nineB727Fs and three B737Fs alongside the four MD-11Fs. A main asset is its regional traffic rights,including fifth-freedom cargo rights in Hong Kong for US and India routes.
