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AirAsia Orders 100 Airbus A320 Jets

Date : 12/13/2012 @ 7:54PM
Source : Dow Jones News

AirAsia Orders 100 Airbus A320 Jets

By David Pearson and Gaurav Raghuvanshi

PARIS--Airbus said Thursday it has received an order for 100 single-aisle Airbus A320 aircraft from AirAsia Bhd. (5099.KU), Asia's largest budget airline that is expanding its fleet to tap into the robust growth in air travel in the region.

The order had been widely anticipated in recent months.

Airbus and AirAsia didn't disclose the price at which the jets will be sold. On the basis of list prices, however, the contract is potentially worth around $9.37 billion. However, airlines are typically able to extract discounts of up to 30% on list prices when purchasing aircraft.

The order comprises 36 of Airbus's current generation A320 single aisle jets and 64 A320neos, the re-engined version of the jet that the manufacturer claims will consume less fuel. The A320neo is under development and is expected to enter into service with customer airlines in 2016.

AirAsia is Airbus's biggest customer, having ordered a total of 475 aircraft to date, comprising 264 A320neos and 211 current generation models of the narrow-bodied jets. It already operates 100 aircraft.

The latest order was announced during a visit by British Prime Minister David Cameron to the Airbus wing manufacturing facility at Broughton in the U.K. "This Government will continue to back UK aerospace; cutting business taxes, investing in exports and working in partnership with the industry to ensure it is fully equipped to compete and thrive in the global race," Mr. Cameron said.

Airbus said the latest order from AirAsia will sustain 1,500 jobs in the UK as well as a further 7,500 in the extended supply chain.

Last year, AirAsia ordered 200 jets from Toulouse-based Airbus, a unit of European Aeronautic Defence and Space Co. EADS N.V. (EAD.FR).

Asian budget airlines have been expanding at a fast pace, betting on steady growth in air traffic in Southeast Asia, where a population of about 600 million remains underserved by air links.

AirAsia, Southeast Asia's largest budget airline by fleet size, reported a 3.6% rise in fiscal third-quarter net profit last month and said it expects a better performance in the fourth quarter. Net profit in the quarter ended Sept. 30 was 157.8 million ringgit ($52.1 million) compared with MYR152.3 million in the year-earlier period.

The company plans to focus on its core markets Malaysia, Indonesia and Thailand in the near term, while it also invests in Japan and Philippines.

-Write to David Pearson and Gaurav Raghuvanshi at david.pearson@dowjones.com and gaurav.raghuvanshi@dowjones.com

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