AirAsia's order for 100 Airbus jets to 'catapult' its growth

This story is sourced from Pro
See more Pro news »

AirAsia's latest order for 100 Airbus A320 aircraft is aimed at helping the carrier accelerate its growth in core markets Malaysia, Thailand and Indonesia.

Its chief executive Tony Fernandes told reporters that the order will mainly facilitate fleet expansion as business has been "very strong" in its three core markets. The low-cost carrier has also brought forward the delivery dates of some of its A320s on order, and the new order will fill the gap left behind.

The carrier's order, announced on 13 December, consists of 36 baseline A320s and 64 A320neos with options for a further 100 aircraft - 50 A320neos and 50 A321neos.

"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," says Fernandes.

He also explained that the need for more of the baseline narrowbody was to fill the gap before the re-engined variant is delivered starting 2016, and to ensure that demand for capacity will not go wasted.

In 2013, AirAsia will receive 34 aircraft through a combination of Airbus deliveries and leases. Ten aircraft will go to its Malaysian operations, nine to Indonesia, eight to Thailand, four to Japan and the remaining three to Philippines.

Thai AirAsia has, so far, had the fastest passenger number growth, and is "on course to be as profitable as the Malaysia operations".

"The added aircraft will for sure catapult them [Thai AirAsia] to grow its dominance domestically and internationally into new big markets such as China and India," says Fernandes.

He adds that the carrier also aims to secure operations at more secondary airports in the region to support its growth and will not be hampered by overcapacity at main airports.

For Indonesia, Fernandes believes the best way forward in a market with a population of over 230 million is "via organic growth".

In October, AirAsia dropped plans to buy a stake in Indonesian carrier Batavia Air after a disagreement over the sale price. The carrier had hoped to capture a bigger portion of the growing Indonesian market, and take on leader Lion Air, with the planned acquisition.

AirAsia will receive its latest 36 A320s up to 2016 - including 22 in 2015 - while its additional 64 A320neos will arrive over the 2017-21 period.

The carrier's 200 A320neos ordered last year will be delivered from 2016 through to 2026.

AirAsia had previously posted a third quarter net profit of ringgit (M$) 158 million ($51.7 million), up by 4% year on year.