AirAsia nears deal for 100 Airbus A220 jets in expansion push
The airline is set to start its Middle East hub in Bahrain as early as this year
[NEW YORK/HONG KONG] Low-cost South-east Asian carrier AirAsia is close to finalising an order for around 100 Airbus regional jets, according to sources familiar with the matter, as the airline looks to expand its operations.
The companies have agreed on terms and an announcement may come as soon as this week, said the sources, who asked not to be identified because the talks are confidential. The timing of the deal is still subject to change, they said.
A 100-jet order would be the single largest purchase of A220 aircraft ever. AirAsia is considering options that could push the total size of the commitment to 150 jets, the sources said.
Representatives for AirAsia and Airbus declined to comment. Reuters previously reported on the potential order.
AirAsia, overseen by Malaysian businessman Tony Fernandes, is pushing hard on expansion plans after scaling back operations and restructuring its finances during the Covid-19 pandemic. Beyond its regional Asian market, the airline is set to start its Middle East hub in Bahrain as early as this year, which will act as a launching pad for transit flights into Europe.
AirAsia operates an all-Airbus fleet with about 250 mostly single-aisle aircraft, and has a backlog of almost 400 orders comprised mostly of the top-selling A320 family of jets. The low-cost carrier tentatively agreed last summer to buy up to 70 of the extra long-range A321neo jets in a US$12.3 billion pact, while phasing out its widebody fleet.
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The A220 deal has been long in the making, with negotiations stretching back into the early part of last year. The model, which can seat between 100 and 160 passengers, is smaller than what AirAsia usually flies but would enable it to operate from smaller airports and in markets that have less demand for traditional single-aisle jets.
A three-digit order haul for Airbus’s smallest commercial jet would be a major boost to the A220 programme, which has been beset by slow sales and supply-chain issues that have impeded output and operators. The A220 is produced at plants in Mirabel, Canada, and Mobile, Alabama. BLOOMBERG
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