AirAsia X places US$19 bil firm order for 150 Airbus A220-300s
KUALA LUMPUR, May 7 — AirAsia X Bhd has signed a firm order with Airbus Canada Ltd Partnership valued at roughly US$19 billion (RM74.3 billion) at list prices for 150 A220-300 aircraft.
The deal includes an option for an additional 150 aircraft from the A220 family, potentially bringing the total order to 300 planes, according to a statement released on Thursday. Deliveries are scheduled to begin in 2028 and continue through 2039.
“In an environment of high fuel prices and volatility, the answer is not to stand still, it’s to double down on efficiency,” said Capital A Bhd chief executive officer and AirAsia Group adviser Tan Sri Tony Fernandes.
This comes as the aircraft will gradually replace AirAsia Group’s older A320ceo fleet and support expansion across Asean and the wider Asia-Pacific region.
Compared with older-generation aircraft such as the A320ceo, the A220 consumes about 20% less fuel, produces roughly 20% lower emissions, and delivers a more than 10% reduction in trip costs.
The smaller aircraft size also allows the airline to profitably serve secondary cities and emerging markets that may not be commercially viable for larger narrowbody aircraft. The group said this would support higher flight frequencies, stronger regional connectivity and improved “Fly-Thru” traffic across its network.
“We never wasted a crisis at AirAsia. We make bold decisions at the right moment, not the easiest moment. This order reflects our long-term discipline and the scale of our ambitions,” he added.
Upon delivery from 2028 onwards, the A220 fleet will mainly serve routes within Asean and Asia Pacific, allowing larger A320s, A321s and A330s to be redeployed to longer-haul destinations, including Europe, Australia and North America.
“We are positive on this development as it will make AirAsia X’s fleet more cost efficient in the long run,” Maybank Investment Bank said in a note on the purchase while maintaining its earnings estimates. The house also highlighted that jet fuel prices have also fallen about 32% from recent peaks due to narrowing crack spreads.
The deal is expected to place only “minimal strain on AirAsia X’s balance sheet” as financing arrangements would likely be secured 10 to 12 months before each aircraft delivery, it added.
The purchase marks the world’s largest firm order for the Airbus A220 by any airline. AirAsia will also become the global launch customer for a new high-density 160-seat configuration of the A220-300.
Engine and maintenance agreements
Separately, AirAsia has signed engine purchase and long-term maintenance support agreements with RTX Corporation’s Pratt & Whitney division, the sole engine supplier for the A220 platform.
The agreements cover the supply and servicing of PW1521G-3 engines under a “Power-by-the-Hour” maintenance programme aimed at improving operational reliability and cost predictability.
All the purchase agreements were announced during a ceremony at Airbus’ facility in Mirabel, Canada, attended by Fernandes, Airbus Commercial Aircraft chief executive Lars Wagner, and a few others.
“The A220 will provide an optimal platform for AirAsia, combining low operating costs with the latest technology to maximise productivity and open up new routes across Asia that were not feasible before,” Wagner said.
Shares of AirAsia X rose to an intraday high of RM1.33 after trading resumed at 10am following the announcement. At the time of writing, it was trading at RM1.30, up five sen or 4%, with more than 61 million shares changing hands. The group was valued at RM4.37 billion.
Source: The Edge Malaysia
