AirAsia renegotiates plane orders with Airbus

PETALING JAYA: AirAsia, the aviation arm of Capital A Bhd, has renegotiated its plane orders with Europe’s Airbus as the airline starts to kick off its dreams of flying around the world with Asean as a central hub.

Chief executive officer Tan Sri Tony Fernandes said both parties have agreed to modify about 10% or 36 planes of the over 400-plane order book, opting for A321lr instead of the initial A321neo.

Speaking about the significance of this deal, Fernandes said this amendment will unlock the group’s dreams of flying longer distances and establishing AirAsia as a key player in connecting diverse destinations across Asia and the world.

“With the new fleet, we can really connect all of Asean with the rest of the world. This extends beyond major cities, encompassing smaller ones as well,” he told the media during a media roundtable held in conjunction with the order amendment yesterday.

Fernandes said that the low-cost carrier looks forward to expanding its narrow-body fleet with the introduction of the A321xlr and exploring opportunities with the A321lr, which are expected to gradually replace the existing A320 predecessor over the coming years, particularly from key hubs such as Kuala Lumpur, Bangkok, Jakarta, Manila and more.

“These new specification aircraft will enable greater flexibility on existing short to medium-haul routes and network expansion to places we have never flown before, including to exciting secondary markets such as North Asia, Australia and Central Asia from South-East Asia,” he noted.

Along with the group’s wide-body Airbus A330 fleet and the new A330neo, the group is planning to broaden its medium to long-haul network to European cities.

“Generally, aviation has always gone from big cities to big cities. But with the given aircraft, we’ll go from secondary cities to secondary cities or even tertiary cities to tertiary cities. This is going to open up tourism and businesses,” he said.

Moreover, Fernandes said the group has applied for its first route to Kenya, aiming to fill the gap in air connectivity between Africa and Asia. He expressed excitement about the prospects in Africa.

Currently, AirAsia’s fleet consists of about 204 planes, with the operational fleet comprising 162 aircraft. Fernandes said the group is looking forward to getting the remaining more than 30 planes up in the air the soonest.

He added that the delivery of its orders from Airbus will commence from June onwards, with a target to acquire about 25 new planes by year-end.

Meanwhile, the Airbus’ newly appointed chief executive officer of the commercial aircraft business, Christian Scherer, remarked on the longstanding, 20 years-plus association between Airbus and AirAsia, acknowledging the entrepreneurial spirit within the airline.

“We have witnessed the courage of this company under its impactful leadership, in creating a brand, vision, and model. Now, AirAsia is in a ‘climb’ mode, ascending to new heights and altitudes,” he said.

Discussing sustainable aviation fuel (SAF), Fernandes said currently it is considered too expensive, being three times more costly than conventional aviation fuel. He emphasised the importance of increasing the supply of SAF to reduce its costs. He also believes that SAF should not be the exclusive solution to reduce carbon footprints.