Air Asia Close To Buying $23 Billion Worth Of Aircraft

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Air Asia, a low-cost carrier based in Kuala Lumpur, Malaysia and holds the first position in terms of fleet size and destinations provided in the Malaysian market. The carrier’s partnership with Airbus has been a long existing one as the airline’s fleet is entirely a mix of Airbus aircraft. Air Asia has been loyal to the aircraft manufacturer and is its second largest consumer of the re-engined A320 narrow-body aircraft.

Air Asia and the A321neo

In 2016, Air Asia placed an order with Airbus for the acquisition of 100 Airbus A321neos at the Farnborough Airshow, when the carrier became an owner of the aircraft type for the first time. The largest model of the A320 Family provided for the first time Air Asia with the ability to offer a flight with a seating capacity of 240 travellers in a single class layout and at the same time reduce operational costs.

Chief Executive Tony Fernandes signs a $12.6 billion order deal for 100 A321neos in 2016.

This year’s Farnborough Airshow will again be attended by the Chief Executive Officer of Air Asia, Tony Fernandes, who has shared his intentions of drastically increasing the A321neos owned by the company. Fernandes is considering the acquisition of another 100 A321neos and potentially increasing its A330neo wide-body accumulation by 34 new aircraft. The discussed deal has a financial value worth $23 billion.  No final decisions on the possible purchase have been made but if Air Asia continues and signs a deal for the aircraft it will surpass its rival Interglobe Aviation Ltd, who is currently Airbus’ largest customer. If purchased, the total number of Airbus planes on order by Air Asia will equate to 504 airplanes.

A new pan-Asian, low-cost carrier on the menu?

CEO Tony Fernandes has previously commented on his objective of setting up a new pan-Asian, low-cost carrier that would compete with Gulf carriers and Air India in winning market share currently held by its competitors. The potential airplane acquisition will certainly help Fernandes establish the new carrier and equip it with a modern and technologically advanced aircraft, providing high capacity and low cost of flying.

Neither Airbus nor Air Asia has provided comments related to the possible deal.

Airbus had previously felt threatened by the possibility of the Boeing 787 Dreamliner winning over the loyalty of Air Asia as a potential substitute for the A330neo aircraft. If Air Asia makes a decision to increase its A330neo order this would be proof of the carrier’s commitments to the aircraft and its manufacturer. However, in order to make the decision, Fernandes has shared that it is necessary for the price to be right. Air Asia’s CEO is certain about his expectations and will take nothing less than what is right and adequate for the company.

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