Airbus inks US$20b Malaysia jet deals on Anwar trade trip

PARIS - Malaysia’s biggest airlines sealed Airbus SE deals worth US$20 billion (S$25.5 billion) as Prime Minister Anwar Ibrahim wrapped up his European tour.

AirAsia Bhd reached a tentative agreement to purchase as many as 70 extended-range Airbus single-aisle jets that could reach US$12.3 billion. Malaysia Airlines Bhd ordered 20 more A330neo wide-body planes, in a deal worth US$7.5 billion, according to Bloomberg calculations before industry discounts are applied.

With aircraft diplomacy taking centre stage, the Malaysian government also said it was planning to purchase two maritime patrol aircraft for the Royal Malaysian Navy, 28 Leonardo SpA AW149 helicopters, and naval vessels from Italy to bolster its security, Bernama reported on July 4, citing the prime minister.

The buying spree, particularly for commercial jets, comes as both Airbus and its American rival Boeing Co. benefit from trade visits and bilateral tariff negotiations.

Boeing’s bumper US$96 billion deal for 210 aircraft for Qatar Airways was announced during US President Donald Trump’s Middle East tour in May. An order for 32 Boeing 787 Dreamliners by British Airways parent IAG SA was the centrepiece of a new US-UK trade deal.

Jet expansion

AirAsia signed a memorandum of understanding covering 50 A321XLR jets with options for 20 more, according to a company statement on July 4. Under the provisional agreement, Airbus’s longest-range narrow-body jet will begin arriving by 2028, Mr Tony Fernandes, chief executive officer of AirAsia parent Capital A Bhd, told reporters. 

“A narrowbody obviously gives us a lot less risk in terms of starting new routes,” he said on a video call. “This order allows us to have a narrow-body fleet that can cover the world.”

AirAsia, one of South-east Asia’s largest budget carriers, plans to use the XLRs to open up routes in China, India and other parts of the Asia-Pacific that would be uneconomical for larger planes requiring more fuel, Mr Fernandes said. AirAsia plans to open a Gulf hub this year and extend its flight network to some European destinations. Capital A is also seeking a secondary listing in Hong Kong. 

The airline is looking to order up to 150 more jets to complete its 15-year strategy, Mr Fernandes said. He said the company is in talks with Airbus over the fate of an earlier order for A330 widebodies, an aircraft category he’d prefer to exit.

Malaysia Airlines, the country’s national carrier, doubled its commitment of A330neos to renew its ageing fleet and fuel its long-haul expansion. Once all delivered, that would take its fleet to 40 of the re-engined fuel-efficient widebody. Deliveries for the additional order are planned between 2029 and 2031.

“This additional order reinforces our long-term vision of building a future-ready fleet that supports sustainable growth, delivers consistent value to our passengers, and strengthens our competitiveness in key markets,” the airline’s group managing director Izham Ismail said in a statement on Saturday.

Mr Anwar was in France for his inaugural visit as prime minister at the invitation of President Emmanuel Macron. France is one of Malaysia’s top five trading partners within the European Union and a key source of foreign direct investment in high-technology and strategic sectors, according to Malaysia’s Foreign Affairs Ministry. BLOOMBERG