AirAsia rules Paris Air Show with record USD 18.2 bn order

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3 Nov 2010
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AirAsia thundered into the Paris Air Show with a record order for 200 revamped A320neo jets on Thursday -- a USD 18.2 billion deal making the Malaysian firm Airbus’s largest airline. Tony Fernandes, Chief Executive, AirAsia flew into France overnight to sign off on what one Paris brokerage termed an “amazing” 200- plane deal, which is also seen as a coup for engine maker CFM International, according to a Reuters report.

The deal also marks an attempt by Airbus to prove the case for its decision to update the best-selling A320 passenger plane, the backbone of low-cost airlines, and put pressure on rival Boeing which is undecided whether to match or trump that move. The AirAsia order eclipsed a USD 16 billion order for 180 aircraft from India’s IndiGo as the biggest ever civil aircraft order by the number of planes. The deal adds to evidence of a multi-speed recovery that has seen Asian economies plan for frenetic transport growth, especially in the low-cost sector.

Underscoring how price sensitive travel has shifted the balance of power in the industry, AirAsia and IndiGo are now Airbus’s first and second largest airline customers, lagging only the US leasing giants ILFC and GECAS. “With this historic deal, AirAsia has secured its future with the ability to meet the huge growth potential offered by the Asian market,” Fernandes said.

Fernandes confirmed at the press conference that he had not taken any options at this point. AirAsia also plans to take another 86 aircraft already on order from Airbus to feed growth in its markets, quashing speculation of conversions to the new plane.

The A320neo is a version of Airbus’s best-selling 150-seat passenger jet offering fuel savings with new engines, from 2015. Another low-cost airline, India’s GoAir, confirmed a previously announced order for 72 A320neo aircraft. So far this week, Airbus has reported firm or provisional orders for 545 A320neo aircraft.
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