Malaysian Air to buy 55 planes for $3.4 billion: papers

KUALA LUMPUR (Reuters) - State-controlled Malaysian Airline System Bhd is expected to announce on Monday an order of up to 55 new Boeing narrow-body aircraft worth up to 11 billion ringgit ($3.4 billion), domestic newspapers said.

The aircraft are expected to be delivered from 2011 onwards, as part of the airline's replacement programme for its ageing fleet of 111 aircraft, the Malaysian Reserve reported, quoting an unidentified source.

Last week, Malaysian Airline's chief financial officer, Tengku Azmil Zahruddin, told Reuters the airline planned to announce the orders within a month. Industry analysts have said it was looking at either Boeing 737-800s and -900s or Airbus A320s

Technical reasons prompted the airline to opt for Boeing 737-800 aircraft over Airbus planes, the Edge financial daily reported, quoting unnamed sources.

Malaysian Airline made a net profit of 851.4 million ringgit last year, snapping two straight years of losses following a business turnaround plan that has seen better yields and cost reductions.

Reuters Estimates put the airline's 2008 net profit consensus at 758.5 million ringgit, rising to 989.7 million in 2009.

Shares of Malaysian Airline last traded at 3.62 ringgit.

($1=3.195 Malaysian Ringgit)

(Reporting by Clarence Fernandez, editing by Jacqueline Wong)