AirAsia in Talks for as Many as 100 A320s on Regional Push

AirAsia CEO Tony Fernandes
AirAsia Bhd. Chief Executive Officer Tony Fernandes. Photographer: Haruyoshi Yamaguchi/Bloomberg

AirAsia Bhd., already sitting on the biggest Airbus SAS A320 order backlog, said it was in talks for as many as 100 more planes as it expands operations across the region.

The airline has held discussions with Airbus on an order for about 50 planes with 50 options, Chief Executive Officer Tony Fernandes said in a Bloomberg TV interview from Tokyo today. The board still needs to approve the plan and decide whether the aircraft will be bought or leased, he said.

“We’re definitely short of capacity,” he said. “We’re in a wonderful part of the world in Asia, where there is still a tremendous amount of growth, and we want to get as much of that growth as possible.”

Asia’s largest budget operator may also accelerate fleet plans for its new venture in Japan, Fernandes said, as low-cost carriers win a greater share of the region’s travel market. The airline, based in Sepang, outside Kuala Lumpur, has about 275 A320s on order, including the planned neo variant, which will feature new fuel-efficient engines.

The new Japanese venture, which is part-owned by All Nippon Airways Co., is due to start flights from Tokyo’s Narita airport in August. The unit may have 25 planes by the end of third year, Fernandes said. The carrier previously said the fleet may total about 30 by 2016.

100th A320

AirAsia, which also has operations in Thailand and Indonesia, took delivery of its 100th A320 planes last week. The carrier signed a deal for 200 A320neo planes last year. Airbus, based in Toulouse, France, plans to begin delivering A320neos in late 2015.

The carrier fell 0.9 percent to 3.51 ringgit at close of trading in Kuala Lumpur. Thai affiliate, Asia Aviation Pcl, is set to begin trading in Bangkok tomorrow after its initial public offering. The Indonesian unit’s planned share offering may slip to the first quarter of next year, Fernandes said.

AirAsia Japan is one of three budget operators starting flights in the country this year. Peach Aviation Ltd., also part-owned by ANA, began services in March. Jetstar Japan, whose shareholders include Qantas Airways Ltd. and Japan Airlines Co., is due to start flights in July. The new airlines are challenging Skymark Airlines Inc., the country’s biggest budget carrier.

AirAsia Japan will offer 10,000 tickets from Tokyo to Sapporo, Fukuoka and Okinawa for 5 yen each as part of a promotion for its debut, Chief Executive Officer Kazuyuki Iwakata told reporters in Tokyo today.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE