AirAsia accelerates fleet expansion as battle with Indonesia's Lion Air moves up a gear

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The AirAsia Group has followed through on promises to order another 100 A320s, enabling it to accelerate expansion at its fast-growing portfolio of low-cost carriers. The new order, announced on 13-Dec-2012, means the group is now committed to more than 350 A320/A320neo deliveries over the next 14 years. While adding aircraft at an average pace of 25 aircraft per year may seem ambitious, the reality is that even faster expansion is potentially sustainable given the fact that AirAsia now comprises of five A320 airlines in five distinct markets, all of which are rapidly growing. Indeed, the real issue is more about keeping ahead of the field in Asia's booming short-haul low-cost market.

 

Indonesia's Lion Air Group, which has quietly overtaken AirAsia as the largest LCC group within Southeast Asia (albeit mostly domestic), captured headlines in late 2011 when it one-upped AirAsias order for 200 A320neos from mid-2011 by committing to 201 737 MAXs.

 

AirAsia is taking the threat of increased competition with Lion, which is planning to launch a new affiliate in AirAsias home market of Malaysia in 2013, very seriously. Its no surprise AirAsia is using the latest order in part to accelerate expansion in Malaysia, where it will aim to beat new Lion subsidiary Malindo into oblivion, and in Lions home market of Indonesia.

 

The latest AirAsia order comprises 36 A320s and 64 A320neos. The 36 additional A320s means AirAsia is now expected to take 93 of the current generation aircraft between 2013 and 2016, based on CAPA calculations. The additional 64 A320neos means AirAsia is now committed to take 264 of the re-engined variant, far more than any other A320 customer, with deliveries expected from the end of 2015 or early 2016 through 2026.

 

Continue reading at http://centreforaviation.com/analysis/airasia-accelerates-fleet-expansion-as-battle-with-indonesias-lion-air-moves-up-a-gear-91790

[JuliusWong 0]

 

AirAsia launch in Q4; may order 50 more Airbus jets: CEO

Asia's largest budget carrier, AirAsia (AIRA.KL), may order an additional 50 Airbus A320 jets on top of its existing record order for 475 of the Airbus model, Chief Executive Tony Fernandes said on Friday.

More reading: http://www.moneycontrol.com/news/business/airasia-launchq4-may-order-50-more-airbus-jets-ceo_880906.html

 

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AirAsia still wants jets after record orders

 

* May buy 50 more A320 jets, lifting orders above 500

* Plans aggressive growth in India, sees Q4 start

* In talks with ANA to turn round Japanese affiliate

* Japan partners may "part ways" if no agreement

By Alan Baldwin

MONACO, May 24 (Reuters) - AirAsia, which smashed order records for Airbus jets to become Asia's largest budget carrier, could buy another 50 planes as it targets aggressive expansion in India, Chief Executive Tony Fernandes said.

Discussion of an order for another 50 A320-family jets, worth $5 billion at list prices, comes weeks ahead of the Paris air show and five months after the Malaysian carrier added 100 jets to its order book to lift total purchases to 475 planes.

AirAsia plans to launch an airline in India in partnership with the Tata Group to cash in on rising demand for domestic air travel among India's expanding middle class. It would start with planes already on order but potentially trigger new orders.

"We're looking at putting in almost a plane every month. We decided that sometimes when we pussyfoot around it takes too long to catch up so we decided just to go for it," Fernandes told Reuters in an interview.

"We've bought a lot of planes but we're still short, we're still leasing planes at the moment, so I was right buying these planes, and we may have to put in another order...(for) 50 or something like that," Fernandes said.

Fernandes said the affiliate, AirAsia India, was recruiting to be ready to launch in the fourth quarter, subject to final clearances. He denied a report the launch had been delayed from September, saying he had always planned the final quarter.

Fernandes was speaking ahead of Sunday's Formula One Monaco Grand Prix, where his Caterham racing team is trailing behind a field that includes cars of Indian drinks tycoon Vijay Mallya - whose Kingfisher Airlines has been grounded by cash shortages.

"I think we run a better airline and he's run a better Formula One team," Fernandes said, asked how his airline would make money in a market known for losses and bureaucracy.

"My point is, we're two very different models. Two very different leaders and you can't compare one with the other."

JAPAN PARTNERSHIP TALKS

Fernandes said the sector's boom and bust cycle, which prompted India to open up the sector to foreign airline investors, had given way to a healthier business climate.

"I said that I will come into India when all these guys have paved the way and made their mistakes."

Although Fernandes still wants to buy planes, analysts say AirAsia is mostly shifting from a period of rapid expansion into new markets and placing huge orders, to taking delivery of those planes and focusing on making its routes profitable.

While Fernandes calls business in Indonesia, home of rival Lion Air, "very good," a Japanese venture has disappointed.

AirAsia posted a 39.23 percent fall in first-quarter profits on Wednesday, hurt partly by loss-making AirAsia Japan.

Fernandes said AirAsia hoped to resolve differences with its partner All Nippon Airways in the next few weeks but did not exclude a break-up of the venture, which allows each partner to pull out with its investment protected by the other.

"The model will work. But I'm not sure our partnership and the way we will run it would necessarily work. We've got to be aligned on that and we're hoping to be aligned. I'm moderately optimistic that we can make it work," he said.

"If we agree in a couple of weeks time then we just go do it. All our other affiliates have made money, Japan should be no different." AirAsia Japan started operations last year.

Asked what would happen if the two sides failed to reach an agreement, he said, "Then we'll have to part ways, I think".

Source: http://www.reuters.com/article/2013/05/24/airasia-airbus-idUSL5N0E51SD20130524

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Airasia Places US$8.6 Billion Order For CFM Engines

 

KUALA LUMPUR, June 19 (Bernama) -- AirAsia announced that it has ordered additional CFM LEAP-1A and CFM56-5B engines to power the 100 Airbus A320 aircraft it ordered in December last year and signed a comprehensive long-term service agreement to support its fleet.

The order, which comprises LEAP-1A engines to power 64 A32neo, CFM56-5B engines to power 36 A320ceo aircraft, five CFM-56B spare engines and nine LEAP-1A spare engines, is worth US$8.6 billion at list price.

It includes a 20-year RPFH (Rate per Flight Hour) agreement, under the terms of which the CFM will guarantee maintenance costs on a dollar per engine flight hour basis.

"We are pleased to expand our LEAP and CFM56 engine orders. CFM has been one of the elements that has helped power our growth over the last decade and we are happy to work with CFM to further strengthen AirAsia's expansion plans," its Group Deputy Chief Executive Officer Datuk Kamarudin Meranun said in a statement Wednesday.

AirAsia has been a CFM customer for more than a decade.

LEAP engines are products of CFM International (CFM), a 50:50 joint company between Snecma (Safran) and General Electric.

More: http://www.cfmaeroengines.com/press/airasia-place-8-6-billion-cfm-engine-order/700