Friday, June 10, 2011

AirAsia may announce large order at Paris Air Show

AirAsia could buy up to 200 Airbus planes in a landmark deal that is potentially set to dominate the Paris Air Show, industry sources said.

The Malaysian budget carrier has said it is considering buying at least 150 A320neo planes with fuel-saving engines as it expands operations in the face of high oil prices.

But negotiations span a range of planes from 150 up to 200 and that could trump a 180-plane provisional order from India's IndiGo as the largest single industry order by number of aircraft, industry sources said, asking not to be identified.

Such a deal would be worth USD$14 billion to USD$18 billion at list prices, depending on the exact model of aircraft involved, though big plane orders tend to generate significant discounts.

Airbus declined to comment. A spokesperson for AirAsia said talks were continuing.

Both sides hope to announce the deal at the Paris Air Show on June 20-26 but the size of the deal and its timing remain uncertain because of the sums involved, industry sources said.

AirAsia founder Tony Fernandes has set his sights on doubling the size of Asia's largest low-cost carrier to rival Southwest Airlines' more than 500 jets.

The plane order, if confirmed, could also give a much-needed boost to transatlantic consortium CFM International.

Industry sources say the Cincinnati-based company is the front-runner to win a lucrative contract for the planes' engines, breaking a drought of orders after rival Pratt & Whitney scooped up most orders for the A320neo.

CFM is a joint venture between General Electric and France's Safran.

Many aircraft offer a choice of engines. These are included in the aircraft list price but in practice are sold directly to airlines by the engine makers.


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