AirAsia reaffirms commitment for fleet migration to Airbus A321neo with conversion of remaining A320 orders

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AirAsia Group (“Group”) has reaffirmed its commitment to transform its present mainly-A320 aircraft fleet to the higher-capacity, more fuel-efficient A321neo with the signing of an amendment agreement with Airbus S.A.S (“Airbus”), in which AirAsia will convert its remaining A320 aircraft orders to the A321neo.

The contract marked AirAsia’s commitment to purchase the largest model in the best-selling A320 Family. Seating up to 236 passengers in a single class layout, the A321neo will enable the airline to increase capacity while benefiting from the lowest operating costs in the single aisle category. Equipped with Airbus’s Space-Flex Cabin that allows for a more efficient configuration of the cabin space, the A321neo delivers an optimal passenger comfort and efficiency.

With the conversion of its remaining 13 A320 undelivered aircraft to the A321neo, AirAsia now has a total order of 362 A321neo aircraft that will be allocated based on demand among its airlines within the Group, with deliveries up until 2035, as agreed between AirAsia and Airbus. AirAsia received its first A321neo in November 2019 and currently has a total of 4 A321neo in service. At present, the Group has a total fleet size of 211 aircraft comprising 169 A320, 38 A320neo and 4 A321neo aircraft.

Bo Lingam, President (Airlines) of AirAsia Group said: “Our airline network and fleet strategy has been thoroughly reviewed to ensure flying on the most popular and profitable routes as we prepare for travel resumption across our network. Our business model is robust, and there is a lot of pent-up demand. We are confident that our airlines will be able to rebound and recover strongly as soon as travel restrictions are lifted.

“We have always been in close engagement with Airbus and we look forward to a full A321neo fleet conversion that will further solidify our lowest cost base and lean cost structure. The A321neo will revolutionise the flying experience for our guests as we accelerate our business to meet a resurgence in air travel post-Covid-19. The A321neo is a leader in its category and it will enable AirAsia to serve the demand across our network with significant operational efficiencies, with more than 10% fuel savings. The A321neo also includes an additional 50 seats and extra cargo space, and will allow us to further reduce our cost per Available Seat Kilometre (ASK) across the group, which will be passed on as lower air fares for our guests.”

The A321neos will eventually replace the older A320s, which will lead to significant sustainability benefits, where the fuel savings translate into some 5,000 tonnes less carbon dioxide (CO2) emission per aircraft per year, in addition to the double-digit reduction in nitrogen oxides (NOx) emissions and reduced engine noise.

Tony Fernandes, CEO of AirAsia Group further commented: “With the gradual easing of travel restrictions and resumption of freight and cargo activities in all of our key markets, we need to make sure that our fleet is cost- and fuel-efficient and highly-optimised for our airline operations, as well as for our logistics venture, Teleport. Teleport is experiencing significant growth in line with overwhelming demand for air freight and cargo services, back to pre-pandemic performance and growing faster than before. We are expanding Teleport’s delivery and digital cargo capabilities to prepare for strong regional expansion as soon as travel restrictions ease and international borders reopen.

“During the downtime in flying, we have turned AirAsia from one of Asia’s leading airline brands into a one stop travel and lifestyle digital travel platform, catering for much more than just air travel. With our huge passenger volume, the impending improvement in travel demand will provide an added boost to the airasia Super App, as well as our fintech and digital payment service, BigPay.

“Our Super App, Teleport and BigPay are equally important to complete our ecosystem. They work in tandem symbiotically, to meet increasing demand in the e-commerce and distribution space. From e-money and international remittance to micro insurance and budgeting, BigPay has been successful in providing a wide range of regulated financial products to become a one-stop solution for our customers’ financial needs.

“We will continue to innovate and adapt. We are already seeing improvements in terms of customer base, as well as revenue and other key metrics. We are set to return stronger and more robust in a post-Covid world.”

Christian Scherer, Airbus Chief Commercial Officer and Head of Airbus International said: “We are pleased to reach this agreement with our long-standing partner AirAsia. It’s another endorsement of the A321neo as the world’s most efficient and popular single aisle aircraft. It’s also an example of how we at Airbus have worked together with our customers to find solutions to adapt to the impact of the pandemic. We are encouraged to see traffic rebound around the world as the travel restrictions ease. AirAsia will be well equipped to benefit from the rebound that will also surely come in Asia, thanks to the combination of pent-up demand, the efficiency of its Airbus fleet and its unique brand.”