Malaysia Airlines (MAS) is to acquire six Airbus A380s from its major shareholder, and assume responsibility for two current Boeing 777s and two 747s, in order to increase fleet ownership.
The aircraft are being acquired from Penerbangan Malaysia Berhad (PMB) - which owns 52% of MAS - under a RM3.19 billion ($929 million) agreement.
MAS will pay a RM1.54 billion in cash to PMB, covering pre-delivery payments for the A380s.
In a document detailing the fleet restructuring MAS says that the agreement will also settle the issue of compensation due to the airline for delay in A380 deliveries.
While the A380s were initially due to start arriving in January 2007 the first delivery was postponed, initially to January 2011 and then to August 2011.
PMB has received damages from Airbus for the first delay but has yet to agree compensation for the second delay. PMB has also been in talks with MAS since last year over the quantity of damages due to the airline.
This unresolved amount, however, is "no longer in question", says MAS, because PMB has agreed to pay the carrier the entire quantity. MAS says the total delay compensation receivable from PMB and Airbus is expected to be "in excess" of RM330 million.
Deliveries of the A380s, which will arrive at a rate of about one per month, will be completed by January 2012.
The two 777s involved in the second part of the deal have been on 12-year lease since late 2004 while the two 747s have been on 12-year lease since March and May 2006.
MAS says it will make an upfront cash payment of RM190 million and assume a liability of RM1.46 billion through the "bundling" of the Boeing aircraft.
The carrier says it has operated, to date, as a "virtual airline" because it leases, rather than owns, its fleet.
But chief executive Azmil Zahruddin says: "Owning an aircraft gives a lower lifetime cost than leasing. While leasing ensures that we have flexibility with our fleet, we pay a premium for this.
"In practice, we do not need full flexibility for the entire fleet. With this [new arrangement] we have the option of either owning the aircraft or doing a sale and leaseback, depending on our requirements."
MAS states that the change will bring the carrier's fleet structure more into line with those of Cathay Pacific, Thai Airways International and Singapore Airlines.
It adds that it expects to realise savings of RM327 million from the A380 transfer and reduction of the remaining lease payments on the Boeings.