Malaysia's AirAsia Group reaches deal with Airbus to restructure plane orders

[KUALA LUMPUR] Malaysia's AirAsia Group has reached a deal with Airbus to restructure an order for 362 narrowbody planes including switching 13 A320neos to the larger A321neo model, the airline said on Wednesday.

Deliveries of the 362 A321neos are now planned through 2035, the airline said, without providing details of previous plans.

Reuters last month reported Airbus had agreed to cut prices or reschedule delivery to salvage a contract worth tens of billions of dollars with its largest Asian customer, according to industry sources.

AirAsia received its first A321neo in November 2019 and currently has four of the planes in service after halting deliveries during the pandemic, which has led to a plunge in travel across South-east Asia.

Airbus sold six A321neos that had been built for AirAsia last year, according to industry sources.

Airbus chief commercial officer Christian Scherer said in a statement that the deal with AirAsia announced on Wednesday was an example of how the planemaker had worked with customers to find solutions to adapt to the impact of the pandemic.

AirAsia Group president Bo Lingam said the airline had thoroughly reviewed its network and fleet strategy to ensure flying on the most popular and profitable routes as it prepared for travel to resume.

"Our business model is robust, and there is a lot of pent-up demand," he said. "We are confident that our airlines will be able to rebound and recover strongly as soon as travel restrictions are lifted."

AirAsia said on Tuesday it had received approval from Danajamin Nasional for a loan of up to RM500 million (S$162.3 million) with an 80 per cent government guarantee.

REUTERS