AirAsia Set To Buy More Airbuses To Build Capacity for International Expansion

AIN Air Transport Perspective » July 16, 2012
AirAsia is expanding fast in Indonesia and the Philippines but still faces obstacles in Singapore and Europe.
AirAsia CEO Tony Fernandes, left, signing a component repair deal with ST Aerospace president Chang Cheow Teck at the Farnborough International airshow.
July 16, 2012, 1:15 PM

AirAsia is locked in negotiations with Airbus over an order for between 50 and 100 aircraft that the Malaysia-based operator wants to buy to fill gaps in its aggressive expansion plans before it takes delivery of its first new A320neo narrowbody in 2016. The deal came close to being announced at last week’s Farnborough International airshow, but AirAsia CEO Tony Fernandes told reporters at a July 12 press conference that they had been unable to close negotiations in time.

Scheduled to begin operations on August 1 is AirAsia Japan, the latest addition to the group’s fast growing network, which already includes Malaysia and Thailand. Fernandes is about to base himself in Indonesia, where he is now launching a new division of AirAsia (with its stake as a foreign investor being restricted by law to 49 percent for the time being).

The operator is also getting established in the Philippines.

However, Fernandes acknowledged that he is facing obstacles to his wider ambitions—not least in Singapore, where the government is continuing to block his plans to establish a low-cost operation. Evidently, Singaporean authorities are concerned about excess capacity on existing routes, to which Fernandes’s retort was that more than half the services launched by AirAsia are completely new routes.

Fernandes said that he has not abandoned plans to establish lasting service to and from Europe, having had to abandon his AirAsia X services to London and Paris in March (blaming high taxes). “What we need is for Airbus to give us a twin-engine aircraft that will have sufficient capacity to serve Europe [profitably],” he said, indicating that the A350s it is due to receive around 2018 or 2019 could fit this purpose. Fernandes added that AirAsia might be able to bring forward delivery of the new long-range widebodies and also said that the new max takeoff weight increase for the A330 could also provide the right equipment to resume long-haul operations.

To support its growing fleet, AirAsia has signed a new 10-year agreement with ST Aerospace, which will provide maintenance-by-the-hour support for 75 of its A320 fleet. The $80 million deal means that the Singapore-based maintenance, repair and overhaul group will be supporting 175 AirAsia aircraft.

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RH Hastings
on July 17, 2012 - 12:48pm

Wasn't it AirAisa's Fernandes that pushed Airbus into offering the 240tonne A330?

Then, Airbus would have been jubilant in announcing another big sale at last week's Farnborough. Was AirAsia, "unable to close negotiations," because they are set too firmly with Airbus?

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