'AirAsia on track to be biggest airline groups'

by **hlk** Mon 04 Jul 2011, 16:17

Low-cost airline, AirAsia, is set to become one of the biggest airline groups in the world following its landmark order of
200 Airbus A320 Neos, says Frost & Sullivan Aerospace & Defence senior consultant Kunal Sinha. He said the firm order by AirAsia validates three important trends.

Apart from the rise of AirAsia, he said the centre of air transport is shifting from North America towards Asia and the market has given a thumbs-up to the A320 Neo product.

"The AirAsia deal is the largest ever single order placed with Airbus in terms of number of aircraft.

"The AirAsia group currently operates 89 A320s and already has orders for another 86 A320s. The 200 A320 neos, which will be powered by CFM LEAP-X engines, will be delivered from 2016 to 2026," he told Bernama today.

Sinha said growth in the commercial aircraft fleet is likely to shift to new territories -- Asia Pacific, China and the Middle East.

He said it is expected to follow a different pattern that brought the North American and European markets to maturity. Narrow body aircraft are expected to form the bulk of the order instead of turboprop and regional jets.

Sinha said Boeing has recently forecast that the Asia Pacific region would require 11,450 aircraft worth US$1.51 trillion till 2030. Asia Pacific will account for about 30 per cent of the global delivery.

The A320neo offers an expected 15 per cent improvement in fuel burn compared to the current generation A320. Thus it allows airlines, particularly the LCCs, to further reduce their unit
operating costs.

Sinha said ordering 200 aircraft was a necessity for AirAsia as the last order AirAsia placed was in November 2007. AirAsia Group chief executive officer Tan Sri Tony Fernandes has
categorically said the affiliates of AirAsia in Thailand and Indonesia would be receiving a large chunk of the 200 additional aircraft.

The company plans to utilise the upcoming initial public offering (IPO) of AirAsia Indonesia and Thailand to fund the acquisition.

Sinha said the new order, however, only gives Air Asia a fleet of 250 aircraft at the end of 2020. He said AirAsia will therefore need to significantly accelerate its current
A320 and A320neo delivery schedule to meet its vision of operating at least 320 aircraft by 2020.

"Nonetheless, this order has cemented AirAsia’s position as the region’s largest low-cost airline group, making it one of the biggest airline groups in the world," he added. -- Bernama