MIRABEL, Quebec – Malaysian budget carrier AirAsia announced on Wednesday (May 6) a firm order of 150 Airbus A220 jets manufactured in Canada, with 150 options to purchase a larger version of the jet if Airbus makes it.The announcement was made at an event near Montreal.
An Airbus A220-300 aircraft flies during its unveiling in Colomiers near Toulouse, France, on July 10, 2018Malaysian budget carrier AirAsia announced on Wednesday a firm order of 150 Airbus A220 jets manufactured in Canada, with 150 options to purchase a larger version of the jet if Airbus makes it.
In January, Reuters reported that Airbus would start offering a larger version of the plane, called an A220-500, to airlines and leasing firms. AirAsia's option to buy the larger plane does not involve the same level of commitment as its firm order of 150 A220s, which requires a deposit.
AirAsia CEO Tony Fernandes said in an interview he believes Airbus will produce the larger version of the jet with 180 seats that would replace Airbus's A320 family, leaving the planemaker to focus on its larger A321 jets. The plane, designed originally by Canadian planemaker Bombardier, typically seats 110 to 130 passengers.
"This plane was built to be stretched when Bombardier built it," said Fernandes, who added he would be the A220-500's launch customer. Airbus, however, is now trying to ramp up production of its existing A220 jets so it can break even on the money-losing programme it essentially took for free from Bombardier in 2018. It has also faced pressure from Embraer's E2, which won a campaign with Finnair in March, and outsold the Airbus A220 three-to-one last year.
Airbus commercial aviation CEO Lars Wagner said the European planemaker intends to take a decision on whether to do a larger version this year and that reaction from airline customers is positive.
"It obviously helps if we have a customer like Tony who publicly said he's going to order another 150," Wagner said in an interview. "I see a lot of demand. "The province of Quebec has a minority stake in the A220 programme, which is produced at a site in Mirabel, north of Montreal, and at a separate assembly line in Mobile, Alabama. A220 planes for non-US customers are produced in Mirabel.
Airbus's decision would come at a time when airlines are trimming flights and raising fears over shortages of jet fuel in Asia and Europe due to conflict in the Middle East. AirAsia recently cut the number of flights due to the spike in fuel prices since the US-Israeli war on Iran disrupted global oil markets.
Fernandes said he did not think Asia would run out of jet fuel and said he hoped AirAsia would return to its normal schedule in July.
"Once we do the decision we need obviously a bit of time to certify it, and the demand is really coming at the beginning of the next decade," Wagner said. If produced, the option for the additional 150 would replace AirAsia's existing A320 current engine option aircraft, Fernandes said.
"So we'll end up with a fleet of A220s which could go from 160 seats to 185 and then we'll just focus on the A321," he said.
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