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MALAYSIA Airlines has signed a provisional agreement to acquire 20 Airbus A330neos to replace its ageing fleet of A330 widebody jets in a deal that also involves aircraft leasing company Avolon.

The airline will buy 10 of the planes from Airbus and then execute a sale-and-leaseback deal with Avolon, with the other 10 leased directly from Avolon, the carrier said on Monday. Industry sources last week told Reuters a deal was expected on Monday.

The planes, which will have Rolls-Royce engines, are scheduled to be delivered from the third quarter of 2024 through 2028, the airline said.

The fleet upgrade, which includes purchase rights for another 20 A330neos, comes amid signs of a pick-up in demand for widebody jets after a lengthy downturn.

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From East Asia to the Gulf, several airlines are renewing widebody fleets as international air traffic recovers from its pandemic lows.

"The A330neo will not only provide modernisation to our fleet and enhanced operational efficiency, but also meet environmental targets through reduced fuel-burn per seat while keeping passenger safety and comfort at its core," Malaysia Airlines Chief Executive Izham Ismail said in a statement.

The airline said it was also working with Airbus on a wider collaboration in Malaysia in areas including sustainable aviation fuel, training, maintenance and airspace management.

Malaysia Airlines, which cut its debt burden by more than half as part of a restructuring agreed with creditors last year, has said it aims to return to profit in 2023 as demand improves.

The A330neos, all of which are the larger A330-900 model, will have 300 seats and operate on the airline's existing network throughout Asia, Australia, New Zealand and the Middle East. - Reuters