AirAsia expands Airbus A330neo order with 34 more planes

(From left) Airbus chief commercial officer Eric Schulz, AirAsia X chairman Rafidah Aziz, AirAsia chairman and AirAsia X Group CEO Kamarudin Meranun flanked by cabin crew at the commercial announcement with Airbus held at 2018 Farnborough Airshow. (Pic courtesy of AirAsia)

KUALA LUMPUR: AirAsia said on Thursday it would expand an order for A330neo passenger jets, adding 34 aircraft to an existing order to bring the total to 100 long-haul wide-body jets worth US$30 billion (RM122 billion) at list prices.

The budget carrier’s AirAsia X Bhd long-haul unit announced the deal, which includes a long-awaited confirmation of an order for 66 planes, at the Farnborough Airshow in the United Kingdom.

It follows a fierce contest between Airbus and Boeing after AirAsia threatened to defect to the Boeing 787 model.

“We got close with Boeing,” AirAsia CEO Tony Fernandes said in Kuala Lumpur. “They ran a good campaign. It was a close fight. They should be applauded as well.

“Until a week ago, I wouldn’t have really known which way we were swinging.”

Deliveries of the A330neos are scheduled to start in the second half of 2019.

They will be operated by AirAsia X out of its bases in Malaysia, Thailand and Indonesia and aid in the airline’s growth.

AirAsia X is Airbus’ biggest customer for the A330neo and a longer-range version of the widebody to be delivered from 2021 would allow it to return to the Kuala Lumpur-London route it dropped in 2012 due to low demand and high fuel prices.

“We now can start London,” Fernandes said. “(But) I didn’t say we are going to start.”

AirAsia X had a firm order for 66 of the fuel-efficient A330neo widebody jets to replace its older first-generation A330s but it has been pushing back the delivery dates.

The airline also has a firm order for 10 A350-900s placed in 2009, but Fernandes in April said that the jet was “too expensive” and would not be purchased.

“I don’t think we’ll be taking any 350-900s,” he said on Thursday, adding the orders would probably be converted to A330neos but he was not sure if that had been done yet.

“We will be pretty focused on the 330neos.”

Airlines typically receive large discounts from list prices, but the A350 has a higher list price than the A330neo.

AirAsia will finance the A330neos through cashflow, debt capital and sale-and-leaseback arrangements, Fernandes said.

Industry sources said Airbus tried to add 100 narrowbody A321neos to the deal but was not able to secure the airline’s agreement.

When asked about a single-aisle deal on Thursday, Fernandes said: “We are still looking to buy more planes.”

AirAsia also signed a deal with Airbus to explore the development of an industrial aeronautical centre in Malaysia over the next 18 months, with options including the establishment of maintenance, repair and overhaul facilities, a training centre and a data centre.