AirAsia continues its aggressive expansion strategy by confirming orders for an additional 100 Airbus A320 aircraft, as it looks to assert its dominance in the region with new routes and added frequencies.
The order consists of 36 A320s with the Current Engine Option (CEO) and 64 A320s with the New Engine Option (NEO) will accelerate growth in the carrier’s core markets Malaysia, Thailand and Indonesia, followed by its new markets Japan and the Philippines.
The order reaffirms AirAsia’s position as the largest A320 Family customer in the world. Altogether, the carrier has now ordered 475 single aisle aircraft from Airbus, comprising 264 A320neo and 211 A320ceo. Over 100 aircraft have already been delivered to the airline and this additional purchase will see AirAsia’s aircraft deliveries continue until year 2021.
Tony Fernandes, Group Chief Executive Officer of AirAsia, said during the signing; “We have three gold mines in Malaysia, Thailand and Indonesia. On the other hand, Philippines and Japan have enormous potential growth.
“With these added aircraft, it goes in-line with our strategy to further build our already extensive network through new routes and added frequencies and allow AirAsia to maintain its market leadership and dominance especially in Malaysia and Thailand.”
AirAsia operations in Malaysia remain the lowest in terms of cost against other airlines in the world and this enables the company defend its margins which remain the highest in the industry.
Thailand has seen the fastest growth in terms of passengers and is on course to be as profitable as the Malaysian operations. The new aircraft will help the Thai arm proliferate its market share domestically and internationally, into new big markets such as China and India.
The additional aircraft will also be vital to AirAsia’s organic growth strategy in Indonesia, acting as a catalyst for expansion in the vast domestic market of 230 million people which remains underserved.
Meanwhile, in Japan and Philippines markets which are new to the AirAsia family, the focus is to grow profitably, maintain lower cost, and ensure market position.
Commenting further, Mr Fernandes said; “We have seen the likes of low-cost carrier giants such Ryanair and EasyJet dominating the European Skies and Southwest in the United States. Their first mover advantage, low cost mantra and discipline business model has allowed them to be a market leader in their own respective markets.
“For AirAsia, we are the only airline that possess those three attributes and we are excited to be in a market of over 3.2 billion people, hence are we confident all this added capacity will allow us to continue to dominate Asean and springboard our expansion into North Asia, China and India in short to medium term.”
The order was announced during a visit by British Prime Minister David Cameron to the Airbus wing manufacturing facility at Broughton in the UK, where Mr Cameron witnessed the signing of documents by Mr Fernandes and Fabrice Brégier, President & CEO of Airbus.
