Thursday, June 18, 2009

AirAsia X leads way with Airbus order

16 June 2009

AirAsia X, the pioneering low-cost, long-haul airline, placed the first significant order for long-range jets during this week’s Paris air show, in a rare sign of encouragement for the world’s leading commercial aircraft makers.

After a series of strong years, new orders to Boeing and Airbus from the world’s airlines have almost dried up this year, leaving the aircraft makers to rely on existing order backlogs to support current production.

By the end of the first week of June, Boeing had booked only seven net new orders this year – 66 cancellations and conversions almost equalled the 73 gross new orders won – while Airbus had booked only 11 net new orders by the end of May.

New orders announced in the first two days of the Paris air show have been modest compared with the big numbers achieved in recent years and so far they have all fallen to Airbus.

AirAsia X, the long-haul affiliate of the Malaysian-based AirAsia, said it had placed firm orders for 10 A350-900s for delivery from the first quarter of 2016, an order valued at about $2.4bn at list prices before discounts.

The jets will be configured to carry more than 400 passengers on a network linking AirAsia’s hub in Kuala Lumpur with destinations worldwide.

Tony Fernandes, AirAsia founder and chief executive, said the group was aiming to “make low-cost travel available to the world … there is a tremendous amount of business to be done, it is not all doom and gloom”.

The orders represent a big gamble by AirAsia X on its strategy for building the first low-cost, long-haul carrier in the modern era.

To date the low-cost airline business model has been exclusively used on short-haul routes, but the Malaysian airline believes it can expand to challenge the world’s big network carriers also on long-haul routes.

AirAsia, along with its long-haul affiliate, has rapidly become one of Airbus’s most important customers with total orders for 210 aircraft. It has already grown from two to 84 short-haul aircraft in operation in seven years.

Separately, Vietnam Airlines yesterday ordered 16 Airbus A321 short-haul jets and signed a memorandum of understanding for two A350s. On Monday, Qatar Airways signed a contract for 24 Airbus A320 jets, while on Tuesday Abu Dhabi’s Etihad Airways placed an order worth more than $5bn for 123 areoplane engines from GE Aviation.

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