AirAsia rules Paris with record order

AirAsia rules Paris with record order

Airbus CEO Thomas Enders, (Right) with Air Asia CEO Tony Fernandes during the Paris Air Show, on Thursday. AP

AirAsia chief executive and Formula One boss Tony Fernandes flew into France overnight to sign off on what one Paris brokerage termed an “amazing” 200-plane deal, which is also seen as a coup for engine maker CFM International.

The deal also marks an attempt by Airbus to prove the case for its decision to update the best-selling A320 passenger plane, the backbone of low-cost airlines, and put pressure on rival Boeing which is undecided whether to match or trump that move. The AirAsia order eclipsed a $16 billion order for 180 aircraft from India’s Indigo, sealed on Wednesday, as the biggest ever civil aircraft order by the number of planes. The deal adds to evidence of a multi-speed recovery that has seen Asian economies plan for frenetic transport growth, especially in the low-cost sector.

Underscoring how price-sensitive travel has shifted the balance of power in the industry, AirAsia and IndiGo are now Airbus’s first and second largest airline customers, lagging only the US leasing giants ILFC and GECAS. “With this historic deal AirAsia has secured its future with the ability to meet the huge growth potential offered by the Asian market,” Fernandes said.

Fernandes confirmed at the press conference that he had not taken any options at this point. AirAsia also plans to take another 86 aircraft already on order from Airbus to feed growth in its markets, quashing speculation of conversions to the new plane. The higher than expected figure of 200 planes was first reported by Reuters on June 10. Shares in Airbus parent EADS bucked a weaker stock market on Thursday and rose over 1.6 percent to 22.2 euros. The A320neo is a version of Airbus’s best-selling 150-seat passenger jet offering fuel savings with new engines from 2015. Another low-cost airline, India’s GoAir, confirmed a previously announced order for 72 A320neo aircraft. So far this week Airbus has reported firm or provisional orders for 545 A320neo aircraft.

Including pre-show deals, there are signs it will reach close to 1,000 A320neo firm deals or provisional agreements by the end of the week. It is a show of force from the subsidiary of Europe’s Airbus but also seen as a deliberate gamble directed at Boeing.

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