Malaysian low-cost carrier AirAsia announced on Wednesday a firm order for 150 Airbus A220 aircraft and signalled plans to acquire up to 150 larger versions of the jet if European planemaker Airbus proceeds with development of the model.
The announcement was made at an event near Montreal, where the A220 is assembled at Airbus facilities in Mirabel, Quebec.
AirAsia said the agreement also includes options for 150 larger A220-500 aircraft, a stretched version of the plane that Airbus is considering introducing to compete more aggressively in the narrow-body market.
The option does not carry the same level of financial commitment as the confirmed order because it does not yet require a deposit.
AirAsia chief executive Tony Fernandes said he expected Airbus to move ahead with the larger aircraft, which he believes could seat around 180 passengers and eventually replace parts of the current A320 family.
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“This plane was built to be stretched when Bombardier built it,” Fernandes said, referring to the jet’s origins under Canadian manufacturer Bombardier before Airbus acquired control of the programme in 2018.
He added that AirAsia would be the launch customer for the proposed A220-500 if Airbus approves production.
The A220, originally developed as the CSeries aircraft by Bombardier, typically carries between 110 and 130 passengers in its current configurations.
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AirAsia also became the launch customer for a new 160-seat cabin configuration of the A220.
The order comes as Airbus evaluates whether to proceed with the larger version of the aircraft amid growing demand from airlines seeking fuel-efficient jets for regional and medium-haul routes.
Airbus commercial aviation chief executive Lars Wagner said the company expected to decide later this year whether to launch the A220-500 programme.
“It obviously helps if we have a customer like Tony who publicly said he’s going to order another 150,” Wagner said.
“I see a lot of demand.”
Airbus has been seeking to increase production of the existing A220 programme, which has struggled to achieve profitability since the European manufacturer took over the project from Bombardier.
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The programme also faces increasing competition from Brazil’s Embraer and its E2 jet family, which has recently secured several airline contracts.
Industry analysts say a larger A220 could allow Airbus to strengthen its position in the market segment between regional jets and larger single-aisle aircraft.
The announcement comes at a difficult time for the aviation sector, with airlines worldwide facing rising operational costs linked to geopolitical tensions in the Middle East and volatile fuel prices.
Fernandes said AirAsia had recently reduced flight frequencies because of surging jet fuel costs following disruptions tied to the conflict involving Iran and the United States and Israel.
However, he said he did not expect major fuel shortages in Asia and hoped the airline would return to normal flight schedules by July.
Airbus said any decision to launch the larger aircraft would be aimed at meeting expected market demand early in the next decade.
“Once we do the decision we need a bit of time to certify it,” Wagner said.
The A220 programme is produced at facilities in Mirabel, Canada, and Mobile, Alabama, with aircraft destined for non-U.S. customers assembled in Canada.
If Airbus proceeds with the A220-500, Fernandes said the aircraft would eventually replace AirAsia’s older A320 models, leaving the airline with a fleet centred on larger A220 variants and the A321.
