AirAsia to fly high as it becomes one of the biggest airlines in the world

SINGAPORE: Low cost airline AirAsia is set to become one of the biggest airline groups in the world following its landmark order of 200 Airbus A320neos, said Frost & Sullivan Aerospace & Defence senior consultant Kunal Sinha.

He said the firm order by AirAsia validated three important trends. Apart from the rise of AirAsia, he said the centre of air transport was shifting from North America towards Asia and the market had given a thumbs-up to the A320neo.

“The AirAsia deal is the largest ever single order placed with Airbus in terms of number of aircraft. The AirAsia group currently operates 89 A320s and already has orders for another 86 A320s. The 200 A320neos, which will be powered by CFM LEAP-X engines, will be delivered from 2016 to 2026,” he told Bernama yesterday.

Sinha said growth in the commercial aircraft fleet was likely to shift to new territories in the Asia Pacific, China and the Middle East, and expected to follow a different pattern that brought the North American and European markets to maturity.

A computer-aided image of AirAsia's A320neo.

Narrow body aircraft are expected to form the bulk of the order instead of turboprop and regional jets.

Sinha said Boeing had recently forecast that the Asia Pacific region would require 11,450 aircraft worth US$1.51 trillion till 2030. Asia Pacific will account for about 30% of the global delivery.

The A320neo offers an expected 15% improvement in fuel burn compared to the current generation A320.

Thus it allows airlines, particularly the LCCs, to further reduce their unit operating costs.

Sinha said ordering 200 aircraft was a necessity for AirAsia as the last order AirAsia placed was in November 2007.

AirAsia Group chief executive officer Tan Sri Tony Fernandes has categorically said the affiliates of AirAsia in Thailand and Indonesia would be receiving a large chunk of the 200 additional aircraft. The company plans to utilise the upcoming initial public offering (IPO) of AirAsia Indonesia and Thailand to fund the acquisition.

Sinha said the new order, however, only gave AirAsia a fleet of 250 aircraft at the end of 2020.

He said AirAsia would therefore need to significantly accelerate its current A320 and A320neo delivery schedule to meet its vision of operating at least 320 aircraft by 2020.

“Nonetheless, this order has cemented AirAsia's position as the region's largest low cost airline group, making it one of the biggest airline groups in the world,” he added. - Bernama