x Abu Dhabi, UAETuesday 25 July 2017

AirAsia orders 100 Airbus A320 jets

Airbus said yesterday it had received an order for 100 single-aisle Airbus A320 aircraft from AirAsia, Asia's largest budget airline.

Airbus said the AirAsia order will sustain 1,500 jobs in the UK as well as a further 7,500 in the extended supply chain.Tomohiro Ohsumi / Bloomberg News
Airbus said the AirAsia order will sustain 1,500 jobs in the UK as well as a further 7,500 in the extended supply chain.Tomohiro Ohsumi / Bloomberg News

Airbus said yesterday it had received an order for 100 single-aisle Airbus A320 aircraft from AirAsia, Asia's largest budget airline that is expanding its fleet to tap into the robust growth in air travel in the region.

The order had been widely anticipated in recent months.

Airbus and AirAsia did not disclose the price at which the jets will be sold. On the basis of list prices, however, the contract is potentially worth about US$9.37 billion (Dh34.42bn).

However, airlines are typically able to extract discounts of up to 30 per cent on list prices when purchasing aircraft.

The order comprises 36 of Airbus's current generation A320 single aisle jets and 64 A320neos, the re-engined version of the jet that the manufacturer claims will consume less fuel. The A320neo is under development and is expected to enter into service with customer airlines in 2016.

AirAsia is Airbus's biggest customer, having ordered a total of 475 aircraft to date, comprising 264 A320neos and 211 current generation models of the narrow-bodied jets. It already operates 100 aircraft.

The latest order was announced during a visit by David Cameron, the British prime minister, to the Airbus wing manufacturing facility at Broughton in the United Kingdom.

"This government will continue to back UK aerospace; cutting business taxes, investing in exports and working in partnership with the industry to ensure it is fully equipped to compete and thrive in the global race," said Mr Cameron.

Airbus said the latest order from AirAsia will sustain 1,500 jobs in the UK as well as a further 7,500 in the extended supply chain.

Last year, AirAsia ordered 200 jets from Toulouse-based Airbus, a unit of European Aeronautic Defence and Space.

Asian budget airlines have been expanding at a fast pace, betting on steady growth in air traffic in South East Asia, where a population of about 600 million remains underserved by air links.

AirAsia reported a 3.6 per cent rise in fiscal third-quarter net profit last month and said it expects a better performance in the fourth quarter. Net profit in the quarter ended September 30 was 157.8 million ringgit (Dh189.8m) compared with 152.3 million ringgit in the year-earlier period.

The company plans to focus on its core markets - Malaysia, Indonesia and Thailand - in the near term, while it also invests in Japan and Philippines.

AirAsia has expanded since Tony Fernandes and his partners bought it in 2001 and now it is Airbus's biggest customer for single-aisle aircraft worldwide.

The airline ordered 200 Airbus A320neo aircraft valued at $18bn at the Paris Air Show last year. That order was signed last month, the people said.

* compiled from Dow Jones Newswires and Reuters