AirAsia X intends to buy 50 Airbus A330-900neo planes

Malaysian airline AirAsia X on Tuesday signed an outline agreement to buy 50 long-haul A330-900-neo passenger planes from Airbus, the European planemaker said.

The deal is worth $13.75 billion (10.11 billion euros) at catalogue prices and deliveries are due to start in 2018, Airbus said on the second day of the Farnborough airshow near London.

Plans for the neo, a new version of the long-standing A330 thanks to upgraded engines, were launched by Airbus at the key industry event on Monday.

"AirAsia X, the long-haul affiliate of Asia's largest low-cost airline (Air Asia), has signed a memorandum of understanding with Airbus for 50 A330-900neo aircraft," said a statement.

"The agreement sees the airline become a launch customer for the latest version of the best-selling wide-body. AirAsia X will also be one of the first operators of the aircraft," Airbus added.

Airbus's main rival Boeing, ahead of the show, raised its forecast for industry aircraft sales over the next two decades to $5.2 trillion, driven largely by demand from low-cost carriers.

AirAsia co-founder Tony Fernandes said the neo was the aircraft "we truly need to develop (to) further our low-cost, long-haul model".

"I think this is going to be a remarkable plane," he told a press conference at Farnborough.

Airbus chief executive Fabrice Bregier said lower fuel consumption, extended long range capability and competitive acquisition costs will make the A330neo "a true game changer" for the aviation industry.

Airbus has managed to win outline agreements for 105 A330 neo planes in the first two days of Farnborough, exceeding its target of 100 sales with several days of the event to go. The other deals were agreed with aircraft leasing companies. In total the European aircraft maker has sealed $25 billion of orders for its passenger planes at the show.

Airbus has said that the A330neo, a rival to the 787 Dreamliner made by US rival Boeing, will be available in two versions: the A330-800neo and the A330-900neo. The neo is expected to cut fuel consumption by 14 per cent per seat compared with existing A330s, while deliveries will start in the fourth quarter of 2017.

Airbus has sold about 1,300 A330s, of which the vast majority are still in service since the model's launch in 1993. The group has forecast sales of the A330neo at potentially more than 1,000 units.

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Thai AirAsia X upbeat on prospects in Thai market

Thai AirAsia X Co Ltd is upbeat on prospects in the Thai aviation market and is looking to serve 200,000 travellers in the first year of its operation.

Its chief executive officer Nadda Buranasiri said the new low-cost budget airline would be flying into three Asian destinations from June 17, while planning to add China to its routes next year.

"You will see a spiderweb of AirAsia's expanding network once we start operations. That will make potential travellers in Asean have a greater choice of travel destinations," he added.

Thai AirAsia X started operations on April 22 and will commence direct flights at the Dong Mueang International Airport on June 17 to South Korea's Incheon International Airport.

The airline will also commence direct flights on its Japan routes a month later and it involves the Narita and Kansai International Airports.

Thai AirAsia X is a 48.9 per cent subsidiary of AirAsia Bhd.

Nadda said Thailand's consumer behaviour had changed following the entry of low-cost airlines such as Thai AirAsia into the country's travel market 10 years ago.

"Online bookings are normal in the life of younger travellers compared to a decade ago when people travelled to other destinations, even within the country, via packaged tours," he added.

He noted that Thai AirAsia X would be focusing on brand building in the first year of its operations before expanding its routes and fleet.

It will operate two leased A330-300 wide-body aircraft to the three destinations.

The aircraft are considered new with two ranging from about five to six years old.

Nadda said Thai AirAsia X is allocating between US$8 million and US$10 million as capital expenditure towards maintaining the aircraft.

Looking ahead, the airline is cautiously optimistic of the future and in respect of expansion plans, against the backdrop of the political, social and economic situation in Thailand.

"Right now, it looks very promising. It also depends very much on the situation in time.

But we are prepared to add more aircraft if the signs are good," said Nadda.

"We see a lot of people coming from China to Thailand. At the same time, Thai travellers like to explore more of China. So, we are looking to add the country to our routes," he said.

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AirAsia X places US$6b order for 25 Airbus A330s

Low-cost Malaysian airline AirAsia X announced on Wednesday an order of 25 long-range A330-300 aircraft with a catalogue price of nearly $6 billion (4.4 billion euros) as it looks to return to serving Europe.

"This order stamps our firm intent to dominate the long-haul, low-cost carrier space and marks the next phase in our development to be the undisputed global market leader," AirAsia X's director Tony Fernandes was quoted as saying in a statement.

Airbus said at a joint press conference in Paris it was the biggest single order for the widebody twin-engine aircraft from an airline, and would begin delivering the planes to the long-haul affiliate of the AirAsia group in 2015.

The order includes the latest version of the A330-300 capable of flying from Asia to Europe or the Americas non-stop.

"We need to come back to Europe and this aircraft is the right aircraft for us to come back," Fernandes said at the news conference. AirAsia X had previously flown to Paris and London, but halted serving the routes in 2012.

AirAsia X already had 26 of the planes on order and currently operates 16 A330-300 aircraft on routes from Kuala Lumpur to Asian and Middle Eastern destinations.

It also announced on Wednesday it was leasing 6 of the aircraft from the US company ILFC.

Fernandes said the AirAsia X is well positioned to dominate the Asian market, and that an announcement of a return to flights to Japan is also close.

He said AirAsia X was looking to emulate the success of Emirates, which has made a success of carrying passengers between continents from its hub in Dubai.

"We will build the equivalent of Emirates in low cost," said the AirAsia X chief. "We have bases and hubs in many countries, so the power of what we can build is much larger."

The AirAsia group is one of Airbus' biggest clients, with more than 120 medium-haul A320 planes in use and with several hundred aircraft on order.

In June 2011 the Malaysian company ordered 200 A320 Neo planes with a catalogue price of $18.24 billion, one of the biggest ever orders of commercial aircraft.

It has also ordered 10 of Airbus' future long-range aircraft, the A350-XWB.

AirAsia saw its third quarter net profit plunge by three-quarters to $11 million in the third quarter of this year due to foreign exchange losses, but its operating profit and passenger numbers both rose.

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Malaysia's AirAsia X ends flat on market debut

Shares in long-haul budget carrier AirAsia X ended flat on their market debut in Malaysia on Wednesday, despite the firm's chief executive promising a spending spree on new planes to boost frequency and target more routes.

The carrier was trading at an intra-day high of 1.28 Malaysian ringgit, up from an initial valuation of 1.25 ringgit, but at close failed to match overall gains in the wider market, which was up 0.13 per cent.

"I think it looks like we priced it right," chief executive Azran Osman-Rani said at a news conference.

He added that the Malaysia-based carrier would use cash from last month's $308.6 million initial public offering to increase its fleet and seek out new destinations.

"Planes, planes, planes. Bigger network, more destinations, more frequencies," Azran said.

The carrier, founded by aviation tycoon Tony Fernandes, has said the funds would largely be used to triple its fuel-efficient Airbus fleet from the current 10 aircraft and repay bank loans.

AirAsia X will take delivery of 23 Airbus A330-300 planes over the next four years with a further order for 10 A350-900s as it aggressively expands routes to meet demand in the Asia-Pacific.

The International Air Transport Association said the region is the world's fastest growing market, with passenger traffic more than doubling since 1998, despite fuel costs surging 55 per cent in the past seven years.

The airline, launched in 2007, reported a net profit of 33.8 million ringgit ($10.8 million) for the year ended December 31, 2012.

Charting an ambitious growth path, AirAsia X plans to increase services to existing destinations and carve out lucrative new routes in Australia, Japan and China.

Analysts said the successful listing of the long-haul arm of AirAsia -- Asia's largest budget airline by fleet size -- showed that a low-cost long-haul business model was viable.

Total demand for the institutional tranche of the public offering was more than 10 times the number of base shares available, the company said.

"Investors may want to pay close attention to this stock because it is one of a handful of airlines in the world that has been innovative and committed to opening new markets," said Shukor Yusof, a Singapore-based aviation analyst with Standard & Poor's.

He told AFP that AirAsia X's listing would encourage other regional carriers, such as fast-growing Indonesia-based Lion Air to follow suit.

The key challenge AirAsia X would face was keeping a lid on fuel costs, which account for about 49 per cent of operating costs, he said.

"The main challenge obviously is to rein in costs. Jet fuel price has started to increase due to uncertainties in the Middle East," Shukor added.

AirAsia X's IPO comes as at a time when several companies in the region have withdrawn from such a move.

In June alone, four companies in Hong Kong either dropped IPO plans or cut their their sizes.

Ooi Chin Hock, a brokerage dealer with Malaysia's M&A Securities, said AirAsia X's "strong management and credible growth plans" was attracting investors at a time when regional markets are choppy.

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Ouch, a punch in the face for Tony even though he has given big plans ahead of the launch of the IPO. Now will it stay limp or have a revival in coming weeks? The market is very volatile at the moment and it won't be easy for it to perform.

AirAsia X plans huge fleet expansion with US$418m IPO

Malaysian long-haul carrier AirAsia X said on Monday it plans to use funds of up to US$418 million from a public listing to more than triple its Airbus fleet and expand routes to meet demand in Asia-Pacific.

The budget carrier founded by aviation tycoon Tony Fernandes hopes to raise the proceeds in an initial public offering (IPO) ahead of its July 10 debut on the Malaysian bourse.

"The estimated amount based on the 1.45 ringgit (US$0.47) per issue share is between 1.1 billion ringgit and 1.3 billion ringgit," Nazir Razak, head of banking group CIMB which is running the IPO, told reporters after the prospectus launch.

AirAsia X had earlier cited a conservative amount saying the IPO could raise RM859 million (US$277 million) from the sale of 592.6 million new shares for between 1.15 to 1.45 ringgit each.

Analysts have said with last month's general election over, investors are looking for a wide range of stocks in Southeast Asia's third largest economy, sparking a fundraising fever in Malaysia.

AirAsia X chief executive Azran Osman Rani said the proceeds from the IPO would finance fleet and route expansion to cement its position in its core markets in Australia and Asia.

The carrier will take delivery of 23 Airbus A330-300 planes over the next four years beginning in July, while it has also placed a firm order for 10 A350-900s.

Detailing the airline's strategy, Azran said it will bolster its position in lucrative markets like Australia, China, Taiwan, Korea and Japan.

It would be followed by adding frequencies to current routes, opening new destinations including to Adelaide in Australia, Nagoya and Fukuoka in Japan and Busan in South Korea.

AirAsia X previously scrapped London flights because of the European debt crisis and focused on serving routes within Asia-Pacific, where sustained economic growth has swelled the middle class.

AirAsia X currently has 10 Airbus A330-300 planes and serves 14 routes across the region, including destinations in Australia, China, Japan and Saudi Arabia.

Azran also said with the arrival of more aircraft it would allow the airline to set up hubs in Thailand and Indonesia.

A hub in Thailand will allow AirAsia X to operate regular services from Bangkok to lucrative markets such as Australia, Japan and South Korea.

A third of the funds raised in the listing will be used to repay debt while another third is slated for capital expenditure, with the balance going to working capital and listing expenses.

Shukor Yusof, an aviation analyst with Standard & Poor's Equity Research in Singapore, has predicted the AirAsia X listing will be a success and the cash raised was "a good start to fund their fleet expansion".

The International Air Transport Association (IATA) has described Asia-Pacific as the world's fastest growing market, with passenger traffic more than doubling since 1998, despite fuel costs surging 55 percent since 2006.

Meanwhile Fernandes dismissed the threat posed by Malindo Airways, an affiliate of Indonesia's budget carrier Lion Air, citing AirAsia's position as Asia's largest budget carrier with a strong balance sheet.

"We are in a very strong position. It will be tough for new airlines or future entrants into the market," he said.

Malindo Airways, however, has already sparked a price war by offering competitive fares with free snacks and luggage allowance. It currently serves domestic routes.

Profit-making AirAsia was Asia's first low-cost carrier to complete an IPO in 2004.

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AirAsia X survives and is ready to fight all competition in its ways. Fleet expansion with A330 and A350 will mean more ambitious plans ahead but one will also have to see how many of the old fleet are they de-registering upon receiving the new orders gradually. This big order will more or less put them on par with Scoot in terms of fleet size when Scoot starts receiving its order of 20 B787 starting 2014. The days ahead will mean better and more comfortable flights in big aircraft but not pay a premium price for it. The mainstream consumers will gain the most out of it.