AirAsia places $12.6-bn order for 100 planes

AirAsia Group operates 1,000 flights per day to more than 120 places in 24 countries

To cater to rising demand, Malaysian budget carrier AirAsia on Tuesday said it would buy 100 new planes from Airbus valued at $12.6 billion.

A321neo — largest model in the best-selling A320 family — aircraft can seat up to 236 passengers in a single class layout. AirAsia said it had signed a firm order with Airbus for the purchase of 100, which would help raise capacity and increased efficiency to meet ongoing growth.

In India, AirAsia operates the airline with the Tatas in the venture. Announcing the deal at the Farnborough Airshow, AirAsia Group chief executive Tony Fernandes said the A321neo would help the airline “meet ongoing strong demand, as well as further reduce our cost per available seat kilometre across the group, which will translate to lower air fares for our guests”.

According to him, the new planes would be operated on the most popular routes and at airports having infrastructure constraints.

“It will allow us to bring higher passenger volumes with the same slots, therefore providing immediate benefits to the airports. These include, among others, more efficient operations, higher revenues from passenger service charges, and more airport retail purchases,” he added.

Currently, AirAsia Group operates close to 1,000 flights per day to more than 120 destinations in 24 countries.

"We recorded a robust load factor of 85 per cent in the first quarter of 2016, up 8 percentage points from the same period last year, and we are confident of maintaining this momentum going forward," Fernandes said.

Airbus President and CEO Fabrice Bregier said the additional order from AirAsia is another strong endorsement for the largest member of the company's single aisle family, which is now the clear market leader in the 200-plus seat category.

With today's order, the total number of A320 family aircraft ordered by AirAsia rise to 575.

To date, over 170 A320s have already been delivered to AirAsia. These are flying with its units in Malaysia, Thailand, India, Indonesia and the Philippines.

The A320neo family incorporates latest technologies including new generation engines and Sharklet wing tip devices, which together deliver more than 15 per cent in fuel savings from day one and 20 per cent by 2020 with further cabin innovations.