Andrea Rothman and Jasmine Wang Toulouse

AirAsia unveiled an order for 100 additional Airbus A320 jets valued at $9.4 billion (R81.2bn) at list prices yesterday as south-east Asia’s biggest discount airline expands to fend off rising competition.

Airbus said the order included 36 current-generation A320s and 64 of the more fuel-efficient A320neos. UK Prime Minister David Cameron joined AirAsia chief executive Tony Fernandes at Airbus’s wing-manufacturing facility in Broughton, Wales, for yesterday’s announcement.

Malaysia-based AirAsia has expanded rapidly since Fernandes and partners took over in 2001, and it is now Airbus’s biggest customer for single-aisle aircraft globally. It ordered 200 Airbus A320neo aircraft valued at $18bn at the Paris Air Show last year.

Airbus had already booked the latest order in its tally last month, without disclosing the customer.

“This order is primarily about expansion,” Fernandes said. “Business has been very strong in south-east Asia, especially Thailand, Indonesia and Malaysia, coupled with very robust demand out of China and India.”

Production of A320neos will start in late 2015. Taking some of the existing model would allow AirAsia to get planes faster, Fernandes said.

The airline should have no trouble implementing the new order considering the demand growth in the regions that it served, said BNP Paribas analyst Arnaud Bouchet.

“I’m not worried about overcapacity as new aircraft delivered will be used as both replacement and new capacity growth,” he said.

“Asia can comfortably absorb additional aircraft in the next 10 years, particularly if these airlines start replacing their current fleet.” – Bloomberg