AirAsia Bhd. (AIRA), the region’s biggest discount airline, plans to unveil an order for 100 Airbus A320 jets today as the carrier expands operations to fend off rising competition, two people familiar with the contract said.
AirAsia Group Chief Executive Officer Tony Fernandes is flying to an Airbus factory in Broughton, Wales, to announce the order, valued at about $9 billion at list price, according to the people, who asked not to be identified as the information isn’t public yet. The airline is buying current-generation A320s as well as more fuel-efficient A320neos, and U.K. Prime Minister David Cameron is planning to attend the event, the people said.
AirAsia has expanded since Fernandes and partners bought it in 2001, and now it’s Airbus’s biggest customer for single-aisle aircraft worldwide. The airline ordered 200 Airbus A320neo aircraft valued at $18 billion at the Paris Air Show in 2011.
The order was signed last month and announced by Airbus as an undisclosed customer, the people said.
“On my way to London,” Fernandes told followers in a message on Twitter yesterday. “Big announcement tomorrow.”
Representatives of the airline weren’t immediately available to comment, while a spokesman for the plane manufacturer declined to comment on plans.
The AirAsia contract has helped Airbus maintain order momentum for the more fuel-efficient A320neo version. Incorporating classic A320s into the contracts is a bonus, as the manufacturer can trim the number of unfilled delivery slots for a model that will gradually be phased out. Production of A320neos will start in 2015. For AirAsia, taking the existing model will allow it to get planes faster to fuel expansion.
AirAsia competes with the budget or regional arms of flag carriers including Singapore Airlines Ltd. and Qantas Airways Ltd. and now faces growing competition from new, emerging low- cost carriers seeking to win passengers seeking low-cost travel options in the region.
Airbus assembles wings for its aircraft in Broughton.
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