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AirAsia orders 100 Airbus planes in $30b deal

Malaysian carrier orders 34 A330neos, adds to earlier 66

Gulf News

KUALA LUMPUR, FARNBOROUGH

AirAsia said on Thursday it would expand an order for A330neo passenger jets, adding 34 aircraft to an existing order to bring the total to 100 long-haul wide-body jets worth $30 billion at list prices.

The Malaysian budget carrier’s AirAsia X Bhd long-haul unit announced the deal, which includes a long-awaited confirmation of an order for 66 planes, at the Farnborough Airshow.

It follows a fierce contest between Airbus and Boeing after AirAsia threatened to defect to the Boeing 787 model.

“We got close with Boeing,” AirAsia CEO Tony Fernandes told reporters in Kuala Lumpur. “They ran a good campaign. It was a close fight. They should be applauded as well. Until a week ago I wouldn’t have really known which way we were swinging.” Deliveries of the A330neos are scheduled to start in the second half of 2019. They will be operated by AirAsia X out of its bases in Malaysia, Thailand and Indonesia and aid the airline’s growth.

AirAsia X is Airbus’ biggest customer for the A330neo and a longer-range version of the wide-body to be delivered from 2021 would allow it to return to the Kuala Lumpur-London route it dropped in 2012 due to low demand and high fuel prices.

“We now can start London,” Fernandes said. “(But) I didn’t say we are going to start.” AirAsia X had a firm order for 66 of the fuel-efficient A330neo wide-body jets to replace its older first-generation A330s but it has been pushing back the delivery dates.

The airline also has a firm order for 10 A350-900s placed in 2009, but Fernandes in April said that jet was “too expensive” and would not be purchased.

“I don’t think we’ll be taking any 350-900s,” he said on Thursday, adding the orders would probably be converted to A330neos but he was not sure if that had been done yet. “We will be pretty focused on the 330 neos.” Airlines typically receive large discounts from list prices, but the A350 has a higher list price than the A330neo.

AirAsia will finance the A330neos through cash flow, debt capital and sale-and-leaseback arrangements, Fernandes said.

Industry sources said Airbus tried to add 100 narrowbody A321neos to the deal but was not able to secure the airline’s agreement.

When asked about a single-aisle deal on Thursday, Fernandes said: “We are still looking to buy more planes.” AirAsia also signed a deal with Airbus to explore the development of an industrial aeronautical centre in Malaysia over the next 18 months, with options including the establishment of maintenance, repair and overhaul facilities, a training centre and a data centre.

WTO arbitrators to consider US request for sanctions in Airbus case

GENEVA: World Trade Organisation arbitrators will evaluate a US request to impose billions of dollars worth of sanctions on European products after a final WTO ruling that found the European Union had given illegal subsidies to Airbus. The request for retaliation for losses incurred by rival Boeing in the long-running dispute over claims of illegal handouts for aircraft makers adds fuel to mounting transatlantic trade tensions. The United States made the request to the WTO last Friday for three judges to set the level of retaliatory sanctions, the global watchdog said in a document posted on Thursday which gave no figure for the amount of sanctions sought. The WTO arbitration is expected to take around a year.

The WTO appeals body ruled on May 15 that the EU had failed to remove subsidised government development loans for the world’s largest airliner, the A380, and Europe’s newest long-haul jet, the A350, causing losses for Boeing and US aerospace workers.

— Reuters

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