AirAsia – Asia’s most profitable low-cost carrier secures another 100 Airbus A320 orders in London
Asia’s largest low-cost carrier accelerates growth in Asia with total record aircraft order now totals 475 narrow-bodies, additional delivery slots until 2021

BROUGHTON, 13 DEC 2012 – Asia’s largest low-cost carrier confirmed another 100 Airbus A320 which further acknowledges its dominance in Asia to have a record 475 narrow bodies on order with Airbus. This such order is part of the AirAsia Group’s regional strategy to continue placing the airline ahead of competition regionally with its extensive growth through new routes, added frequencies and remain the most profitable low cost carrier in Asia.

The 100 Airbus A320s ordered consist of 36 A320s with the Current Engine Option (CEO) and 64 A320s with the New Engine Option (NEO) to accelerate its growth in its core markets Malaysia, Thailand & Indonesia followed by its new markets Japan and the Philippines.

The order was announced during a visit by British Prime Minister David Cameron to the Airbus wing manufacturing facility at Broughton in the UK, where Mr Cameron witnessed the signing of documents by Tan Sri Tony Fernandes, Group Chief Executive Officer, AirAsia and Fabrice Brégier, President & CEO, Airbus.

The contract reaffirms AirAsia’s position as the largest A320 Family customer in the world. Altogether, the carrier has now ordered 475 single aisle aircraft from Airbus, comprising 264 A320neo and 211 A320ceo. Over 100 aircraft have already been delivered to the airline and this additional purchase will see AirAsia’s aircraft deliveries continue until year 2021.

Tan Sri Tony Fernandes, Group Chief Executive Officer of AirAsia said during the signing, “We have three gold mines in Malaysia, Thailand and Indonesia. On the other hand, Philippines and Japan have enormous potential growth. With these added aircraft, it goes in-line with our strategy to further build our already extensive network through new routes and added frequencies and allow AirAsia to maintain its market leadership and dominance especially in Malaysia and Thailand.  

In Malaysia, we have overcome many challenges in the past 10 years and saw competitors come and go while AirAsia continued on its growth trajectory together with increased margins, load factor and revenue per available seat kilometer. The key success is due to our focus and discipline in terms of cost and our business model. This allows the operations in Malaysia to remain the lowest in terms of cost against other airlines in the world and this enables the company to maximize revenues through increased load factors, ancillary income and a stronger balance sheet. With this key ingredient, AirAsia remains in position to defend its margins which remains the highest in the industry.

Thailand has seen the fastest growth in terms of passengers and they are on course to be as profitable as the Malaysian operations. The added aircraft will for sure catapult them to grow its dominance domestically and internationally into new big markets such as China and India. With the recent move to dedicated low cost carrier terminal in Don Mueang and AirAsia being the anchor airline in operation there, we see our growth to catapult many folds in the short term. This ties-in with our vision to secure more secondary airports in the region in order to support our rapid growth and not be hampered by overcapacity in any main airports.

We are already best in class internationally in Indonesia and with this aircraft addition, it will be an added thrust to penetrate the vast domestic market that remains underserved. Being a successful regional airline throughout Asean, it allowed us build the brand successfully internationally in Indonesia and we are confident we can replicate the same domestically. We foresee the best way to grow optimally is via organic growth especially with a market with a population of over 230 million people which is a key catalyst for boosting revenue.

As Japan and Philippines are new in the AirAsia family, our focus is to grow profitably, maintain lower cost and ensure we position ourselves as the no.1 brand in these markets.

“AirAsia is one of the great success stories of recent years in the airline business,” said Fabrice Brégier, President & CEO, Airbus. “The repeated confidence the airline places in the A320 is a clear endorsement of the reliability, efficiency and unbeatable operating economics offered by the world’s most modern single aisle product line.”

The additional number of delivery slots for the 36 newly purchased Airbus A320 CEOs will be up to year 2016, with two to be delivered in 2013; four in 2014; 22 in year 2015 and eight more in year 2016. The remaining 64 Airbus A320 NEOs will be delivered beginning year 2017 with eight deliveries; 14 in year 2018, 15 in year 2019; 14 in year 2020 and 13 more in year 2021.

The deliveries for the existing 200 Airbus A320neos purchased last year will still be from year 2016 up to year 2026. As part of the purchase agreement, AirAsia will also have the option for another 100 aircraft consisting of 50 Airbus A320 NEO and 50 A321 NEO.

Tan Sri Tony Fernandes commented further, “We have seen the likes of low-cost carrier giants such Ryanair and EasyJet dominating the European Skies and Southwest in the United States. Their first mover advantage, low cost mantra and discipline business model has allowed them to be a market leader in their own respective markets. For AirAsia, we are the only airline that possess those three attributes and we are excited to be in a market of over 3.2 billion people, hence are we confident  all this added capacity will allow us to continue to dominate Asean and springboard our expansion into North Asia, China and India in short to medium term.

In line with our growth plans, in 2013 through combination of firm Airbus deliveries and leases - Malaysia will take delivery of 10 aircraft, Thailand – 8 , Indonesia – 9 aircraft, Philippines – 3 aircraft and Japan - 4 aircraft.

Aireen Omar, Chief Executive Officer For Malaysia AirAsia said, “The demand has been on a continuous upward trend, from 200,000 guests when first launched in 2001 to an estimated 32 million this year. This order solidifies our position as the world's best low-cost airline and will expedite our growth requirements as we see demand will continue to rise across our network. The new order will facilitate our expansion plans in which Malaysia AirAsia will add connectivity to other parts of Asia as well as increase frequency to existing routes. AirAsia guests can look forward to more exciting routes from AirAsia.”

“As part of our continuous cost initiatives, the addition of the Airbus A320neos sharklet wingtips, the aircraft type offers approximately 15% reduction in fuel consumption per aircraft per annum which help drives down our cost further enabling the company to optimize revenues,” added Aireen.