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Abu Dhabi, UAEWednesday 14 November 2018

AirAsia X mulls shake-up of Airbus order to narrowbody jets

Singapore carrier has yet to firm up tentative widebody order placed in July

An Air Asia plane comes into land at Phuket airport. Long-haul brand Air Asia X may amend its planned Airbus order, the CEO said. EPA
An Air Asia plane comes into land at Phuket airport. Long-haul brand Air Asia X may amend its planned Airbus order, the CEO said. EPA

AirAsia X, the long-haul brand of Singapore-based Air Asia, is considering switching some of a proposed Airbus widebody order to narrowbody A321neos, the chief executive of its Malaysian arm said on Friday.

“This is something the team is discussing,” AirAsia X Malaysia chief executive Benyamin Ismail told reporters on the sidelines of a Centre for Aviation (Capa) conference.

Air Asia X has yet to firm up a tentative order for 34 Airbus A330neo widebody jets placed in July.

Mr Ismail said the A321neos could be used in smaller markets where widebodies are too big, or in off-peak seasons, but the number that could be switched to had not been decided.

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The A330neo has a list price of $296.4 million each compared with $129.5m for the smaller A321neo, though airlines typically receive large discounts from manufacturers.

A switch to narrowbodies would be a setback for Airbus' A330neo programme, which has been hit by a series of market losses to the rival Boeing 787.

AirAsia X is the largest customer for the A330neo, which is more fuel efficient than the older A330ceo jets that are part of the airline's fleet at present.

Ismail said the deal signed with Airbus in July for 34 A330neos was a memorandum of understanding that had yet to be signed off on by the company's board, but an earlier order for 66 A330neos was firm, with deliveries set to start by the end of 2019.

In July, Airbus called the deal for 34 more A330neos "firm", which observers said usually means approvals have been received and deposits paid. But the manufacturer has yet to place the deal in its order book.

Ismail said the airline had yet to rule out the future purchase of Boeing 787s as a result of potential problems with the Rolls-Royce Holdings PLC engines on the A330neo.

Similar Rolls-Royce engines on the 787s have had significant issues requiring maintenance fixes. AirAsia X would consider buying 787s with General Electric Co engines, Ismail said.

AirAsia X founders Tony Fernandes and Kamarudin Meranun last week stepped down as co-chief executives of the group, which has offshoots in Malaysia, Thailand and Indonesia. They will remain non-executive directors.

Nadda Buranasiri, head of the Thai arm since 2014, was appointed as new group chief executive.

Ismail said there were no plans to merge short-haul airline Air Asia Group with Air Asia X even though it was possible both groups could operate narrowbody jets in the future.