AirAsia announces S$41.2b deal for 100 Airbus planes to pave way for non-stop European routes

An Airbus A330neo commercial passenger aircraft takes off in Colomiers near Toulouse, France, on July 10, 2018.
An Airbus A330neo commercial passenger aircraft takes off in Colomiers near Toulouse, France, on July 10, 2018.PHOTO: REUTERS

SEPANG (AFP) - Malaysian budget airline AirAsia on Thursday (July 19) announced an additional order of 34 Airbus A330neo planes, bringing the total value of its expanded 100-plane order to US$30 billion (S$41.2 billion) as it sets its sights on European routes. 

The first delivery of the jets will arrive towards the end of 2019 and will allow the airline to take on longer non-stop routes to Europe, AirAsia boss Tony Fernandes said at a media event. These will be used by its long-haul arm, AirAsia X, replacing its older first-generation A330s. 

“We can now start the London route... This plane allows us to fly to Brazil, Namibia and anywhere we want,” he said. 

The Kuala Lumpur-London route was dropped in 2012 due to low demand and high fuel prices. 

“We lobbied hard for the A330neo after seeing the success of the A320neo, and working closely with Airbus, we have arrived at an aircraft that we are confident will allow us to expand our low fares offering beyond Asia Pacific to the rest of the world,” AirAsia X chief executive Kamarudin Meranun said. 

The deal makes AirAsia the biggest Asian customer of European aviation giant Airbus, which has been locked in a tight battle for dominance with US rival Boeing. 

The twin-aisled A330neos are a fuel-efficient upgrade of the current A330s operated by AirAsia. Fitted with Rolls Royce Trent 7000 engines, the planes will reduce fuel consumption by 25 per cent, the planemakers said. 

But the jet has been edged out by the newer Boeing 787 and was depending on AirAsia to revive sales of the upgraded long-haul plane. 

Boeing on Thursday said it had firmed up an order for at least 10 787s from Hawaiian Airlines after the airline cancelled an order for the A330neo. 

Mr Fernandes also said Airasia and Airbus have began “talks” to explore cooperation to develop an industrial aviation centre in Malaysia which will include a repair and overhaul facility and a training centre. 

AirAsia is Asia’s largest budget carrier by fleet size but has been hit by some negative publicity recently. 

In May, Indian authorities raided the airline’s local offices and accused Mr Fernandes of illegally obtaining operating licences. 

Earlier that month, Fernandes apologised for a controversial stunt endorsing Malaysia’s scandal-tainted prime minister Najib Razak in the country’s general election, in which he suffered a stunning defeat. 

Mr Fernandes, a millionaire ex-music executive, has styled himself as Asia’s answer to British tycoon Richard Branson.