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AirAsia new A320 order to support short-term expansion

AirAsia says it decided to order 14 more Airbus A320s to support its short-term expansion, and that the jets will be delivered in the next two years.

In a filing on the Malaysian stock exchange, the low-cost carrier says that 10 aircraft will be delivered in 2018, and the remaining four in 2019.

The low-cost carrier explains that the order will "support the short-term growth and expansion requirements" in 2018 and 2018 in its key markets of Malaysia, Indonesia, Thailand, Philippines and India. The jets will also be used for its upcoming Japan operations.

AirAsia says these markets are experiencing "better than expected performance, favourable market demand and [a] low fuel price environment", but that the carrier is currently facing a shortage of aircraft for expansion.

Another reason for the 14 aircraft order, it says, is due to the "limited opportunity" to push forward the deliveries of its A320neos on order to 2018 and 2019. The carrier adds that the Japan Civil Aviation Bureau has also not certified the A320neo for operations in the country. However, All Nippon Airways has two of the type in service.

The 14 aircraft will be funded by a combination of borrowings, internal reserves and cash generated from operations.

The deal takes the number of A320-family jets ordered by AirAsia to 592. The group has 171 A320s and eight of the re-engined aircraft in service.

Flight Fleets Analyzer shows that the carrier is scheduled to take delivery of 10 A320neos later this year, 38 units in 2018 and another 42 in 2019.

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