Air Asia Group and Airbus reach agreement over restructuring of massive plane order

Air Asia X ©AirTeamImages

Malaysia’s Air Asia Group has come to an agreement with European planemaker Airbus over changes to an existing order for 362 narrow-body planes. As part of the arrangement, 13 A320neos will be switched to the larger A321neo model. While the original schedule for deliveries is not publicly known, the new schedule will see deliveries through to 2035.

According to Reuters news agency, Airbus has also improved the terms of the purchase of the planes by the cash-strapped carrier in order to salvage the valuable contract. While Air Asia currently operates four A321neos, it put a halt on deliveries during the pandemic and during that period Airbus sold six A321neos that had been built for it. There had been considerable speculation from the carrier’s auditors over Air Asia’s ability to remain a going concern during the pandemic when taking into account its effect on the travel industry as a whole. However, this week AirAsia said it had received approval from Malaysia’s only financial guarantee issuer for a loan of up to 500 million ringgit (US$120 million) with an 80% government guarantee.

AirAsia Group President Bo Lingam said the airline had thoroughly reviewed its network and fleet strategy as it prepares for travel to resume. “Our business model is robust, and there is a lot of pent-up demand,” he said. “We are confident that our airlines will be able to rebound and recover strongly as soon as travel restrictions are lifted.”

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