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AirAsia closed to major deal worth US 9 billion with Airbus
Update: 08:49, Monday, Sep 10,2012 (GMT+7)
AirAsia is putting finishing touches to a deal to buy up to 100 Airbus jets, ending a flirtation with Canada's Bombardier and putting Asia's largest budget carrier on course for regional expansion.

The deal for A320-family jets, potentially worth about US$9 billion (RM27.99 billion), is designed to fuel the growth of what is fast becoming a cluster of related airlines under Tan Sri Tony Fernandes, who placed a record order for 200 Airbuses last year.


Demand from Asian low-cost carriers is helping to drive production at Europe's Airbus and US rival Boeing to record levels, shielding aerospace workers from recession.

AirAsia says it still needs more of the existing generation of A320 to support ambitious short-term plans, which include expansion in the Philippines, Indonesia and Japan.


The deal ends speculation over talks between AirAsia and Canada's Bombardier, whose chairman intervened personally earlier this year to try to persuade Fernandes to pick its CSeries jet, a new challenger to Airbus and Boeing.

AirAsia's latest move could also sharpen competition with Indonesia's Lion Air, another big-spending low-cost carrier that has emerged as one of Boeing's biggest customers.

AirAsia, with an operating fleet of 116 aircraft, has ordered a total of 375 Airbus jets as part of dramatic plans for expansion that now include the acquisition of Indonesia's Batavia Air. It has said it will bring forward deliveries as rising demand helps it offset high fuel costs.

Theresa

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