Bloomberg News

Airbus Wins Order From AirAsia X for 25 A330s Worth $6 Billion

December 18, 2013

Airbus SAS won an order from AirAsia X Bhd. (AAX), the long-haul subsidiary of Asia’s largest low-cost carrier, for 25 A330s valued at $6 billion, benefiting from rapid growth in air travel in the Asia-Pacific region.

The order is for the A330-300 variant and is firm, with deliveries set to begin in 2015, Tony Fernandes, the chief executive officer of AirAsia (AIRA) X’s parent, said in Paris today.

Airbus aims to keep its A330 twin-aisle jet in production for another decade as low-cost airlines seek cut-price planes to introduce long-haul services. The A330 series initially benefited from a three-year delay for entry into service of Boeing Co. (BA:US)’s 787 Dreamliner, and continues to find demand from carriers that don’t need the full range of the Boeing model or Airbus’s planned A350-900 and want lower capital costs.

The airline is “taking this low-cost model to another level,” Fernandes told reporters at the briefing. “The world doesn’t wait,” he said, saying the company plans to build the equivalent of Emirates, the rapidly-growing Middle East carrier, in the low-cost area. The company will pay for the planes with cash flow and debt, he said.

Airbus originally designed the A330 as a regional aircraft before bulking up the twin-engine model to perform long-distance routes that link Asia or Latin American with Europe. In recent months, the company has introduced a heavier version that can carry more fuel or passengers, and another lighter-weight version optimized for shorter distances. Fernandes said the order includes some higher-range version.

Engine Variants

The A330 is powered by engines made by Rolls-Royce Holdings Plc (RR/) -- the most popular variant lately --, Pratt & Whitney as well as General Electric Co. (GE:US)

AirAsia X, which listed in Kuala Lumpur in July, plans to replicate the business model of parent AirAsia by opening secondary hubs in other Asian cities. Budget airlines in Southeast Asia have ordered at least 1,000 new aircraft in the past five years as economic expansion across the region enables more people to start flying in countries such as the Philippines and Vietnam.

AirAsia X plans to have a fleet of 43 planes by 2018, up from 16, the airline said last month. AirAsia X’s affiliate won rights to use Bangkok as a base in October and is also seeking to operate out of Jakarta. In its home base, a new budget terminal is scheduled to open outside of Kuala Lumpur in May, allowing the carrier and AirAsia to accelerate growth.

To contact the reporters on this story: Andrea Rothman in Toulouse at aerothman@bloomberg.net; Francois de Beaupuy in Paris at fdebeaupuy@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net


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