AirAsia extend Airbus order by another 100 A320neo

AirAsia will buy an extra 100 Airbus A320neo jets, taking its record-breaking order to 300 planes, a source said, a deal that would make the Malaysia-based low-cost airline one of the world's largest carriers. AirAsia and Airbus announced an USD$18.2 billion deal for 200 planes at the Paris Air Show last month, shattering aviation records for the largest ever airline order. The additional order takes the list price of the contract to a staggering USD$27 billion. The bumper order highlights Airbus's growing lead over Boeing and throws the spotlight on AirAsia's aggressive growth plans at a time when high oil prices and an uncertain global economy are clouding the outlook for travel demand. Analysts expect the extended order to drive AirAsia's expansion as it competes with short-haul carriers such as India's IndiGo, Singapore's Tiger Airways and Australia's Jetstar in the Asia-Pacific region, the fastest growing in the world. "AirAsia's last replacement order was in 2007/2008. These new orders are long overdue so it's not an aggressive order," said Kunal Sinha, an aerospace expert with the Frost & Sullivan consultancy. "AirAsia's new fleet is to be used mostly to link Southeast Asia to India and China. By 2015, Southeast Asia will have open skies so you have to have a growth plan."

Boeing on Wednesday said it expected 33,500 new planes to be delivered by 2030, driven by growth in India and elsewhere in Asia. AirAsia plans to list its operations in Thailand and Indonesia this year as it expands in those markets and is in talks to open a hub in Singapore, its chief executive Tony Fernandes has said. Like the previous order, the additional 100 planes would also use CFM International engines, the source with direct knowledge of the deal said, declining to be identified because the deal is not public yet. The source said AirAsia would receive a discount for the entire order, but did not give further details. AirAsia's regional head for corporate finance and treasury Aireen Omar said, "We ordered 200 and so far there are no changes." An Airbus spokesman said the manufacturer would not comment on commercial discussions with customers that were confidential. AirAsia, which flies to 63 destinations in more than 20 countries, has 90 planes currently, almost all single-aisle Airbus A320s. Besides the 300 Airbus A320neo deal, it has another 75 Airbus aircraft already on order. "Though we look aggressive, we have expanded very cautiously," Fernandes said this week. "But I have always said this airline is worth at least 500 aircraft."

According to International Air Transport Association (IATA) data, United Continental had the largest passenger fleet of 737 planes at the end of 2010, followed by Delta Air Lines with 722, American Airlines with 618 and Lufthansa with 427. Non-IATA member Southwest Airlines, the only low-cost carrier currently in the top five, has around 550 planes. "AirAsia had the first-mover advantage and it continues to stay ahead of the game by ordering fuel-efficient planes and keeping the size growing," said an aviation analyst with a Malaysian investment bank who declined to be identified due to company policy. "But the key risk is if expansion plans do not succeed. The Malaysian base is fairly saturated so if the other markets do not grow or cannot take off because of protectionism or other factors, then they will find themselves having to manage a lot of aircraft," the analyst said.

Fernandes said the A320neo purchases would be funded by debt and cash flow as staggered deliveries begin in 2016. "We're buying the planes now, we don't pay for it all now. They become due in 2016 so we're just paying some deposits now which is not erroneous at all to our balance sheet." The A320neo is a version of Airbus's best-selling 150-seat passenger jet offering fuel savings with new engines from 2015. The huge orders for the single-aisle plane at the Paris Air Show have piled pressure on rival Boeing to come up with a newer version of its 737 workhorse. Fernandes said his airline's growth was closely twinned with Airbus. "We have a fantastic relationship with Airbus," he said. "They are much more than just suppliers to us. I credit them tremendously with our growth and I want to be more than just a customer of theirs."

It is now part of aviation industry lore that Fernandes asked Airbus chief salesman Joe Leahy to come on to the dance floor of a Paris nightclub before signing the A320neo deal. "As part of a family we do some crazy things together," the 47-year-old Malaysian millionaire said. Asian budget airlines placed a record USD$42 billion in plane orders during the Paris Air Show, illustrating their high expectations for travel in the world's fastest growing market and also triggering worries some may not survive. Many of the no-frills carriers such as AirAsia and Indigo aim to more than double their fleets to power rapid growth, partly at the expense of full-service airlines such as Cathay Pacific and Singapore Airlines. Worldwide passenger demand is expected to rise 4.4 percent over the next year with the Asia-Pacific region growing faster at 6.4 percent, according to IATA, which represents the majority of airlines operating in the USD$598 billion industry. The Centre for Asia Pacific Aviation, an independent aviation market research provider, said low-cost carriers accounted for 16 percent of the market in terms of seats within Asia Pacific last year, up from 6 percent in 2005. Their market share is set to rise 2 percentage points annually to about 26 percent in 2015, it said.

Paris air show aircraft orders' list

The orders confirmed by Airbus and Boeing as it stands at Paris air show.

Company Firm Value Provisional Value

Airbus 312 $30.2 bln 318 $29.5 bln

Boeing 47 $7.5 bln 94 $14.9 bln



Last year at Farnborough Airshow, Airbus unveiled net new orders for 130 planes worth over $13 billion, and Boeing 103 new orders worth over $10 billion.

Between them, they racked up a combined 176 provisional orders worth over $19 billion



AIRBUS ORDERS BY CUSTOMER:
FIRM ORDERS

Company No of aircraft Type Value

LAN 20 A320neo $1.8 bln

IndiGo 30 A320 $2.5 bln

IndiGo 150 A320neo $13.7 bln

TransAsia 6 A321neo $0.6 bln

Air Lease Corp 11 A330 $2.4 bln

Air Lease Corp 1 A321 $0.1 bln

SAS 30 A320neo $2.7 bln

GECAS 60 A320neo $5.5 bln

Saudi Arabian 4 A330 $0.9 bln



PROVISIONAL ORDERS

Company No of aircraft Type Value

Alafco 30 A320neo $2.7 bln

Republic 40 A320neo $3.6 bln

Republic 40 A319neo $3.4 bln

Avianca 18 A320 $1.5 bln

Avianca 33 A320neo $3.0 bln

Alafco 6 A350-900 $1.6 bln

Garuda 15 A320 $1.3 bln

Garuda 10 A320neo $0.9 bln

JetBlue 40 A320neo $3.6 bln

CIT 50 A320neo $4.6 bln

Air Lease Corp 36 A320neo $3.3 bln



BOEING ORDERS BY CUSTOMER:

FIRM ORDERS

Company No of aircraft Type Value

*Malaysian 10 737-800 $0.8 bln

*Aeroflot 8 777-300ER $2.3 bln

Norwegian 3 787 $0.6 bln

Norwegian 15 737-800 $1.2 bln

Mongolian 1 767-300ER $0.16bln

Mongolian 2 737-800 $0.16bln

Unidentified 2 747-8 $0.6 bln

*Qatar Airways 6 777-300ER $1.7 bln * - orders were previously in Boeing order book but customer was unidentified



PROVISIONAL ORDERS

Company No of aircraft Type Value

UTair Aviation 7 737-900ER $0.6 bln

UTair Aviation 33 737-800 $2.7 bln

GECAS 8 777-300ER $2.3 bln

GECAS 2 747-8F $0.6 bln

Unidentified 15 747-8 $4.8 bln

Air Lease Corp 20 737 $1.6 bln

Air Lease Corp 5 777 $1.4 bln

Air Lease Corp 4 787-9 $0.9 bln

Big orders help AirBus

Airbus said on Monday it had won an order for 60 narrow-body A320neo planes worth $5.1 billion at list prices from the commercial aircraft leasing and financing arm of General Electric. Analysts expect narrow-body planes, the backbone of fast-growing budget airlines, to be a key battleground for orders between Europe's Airbus and U.S. rival Boeing at the biennial air show. Airbus believes it has the upper hand with the A320neo, whose more efficient engines save airlines 15 percent in fuel costs, according to the company. Engine maker Pratt & Whitney boss David Hess said on Monday he expected an astounding amount of demand for the A320neo. Sources close to the matter said Airbus was also likely to report an order on Monday for 30 A320neos worth about $2.4 billion at list prices from Scandinavian airline SAS.

Qatar Airways said it hoped to conclude a deal this week to buy A320neo planes as well. Boeing conceded it might lose some customers while it makes a decision about whether to re-engine or redesign its competing 737 narrow-body plane, although it was confident of winning out over the longer term. It also upstaged Airbus with successes in other plane sizes and booked the first big order of the show for six 777-300ER wide-body jets worth $1.7 billion at list prices from Gulf carrier Qatar Airways. Analysts expect Middle Eastern and Asian airlines to dominate the buying as they seek to boost transport links for their booming economies. The Boeing deal came a day after Airbus unveiled plans to boost the range of its future competing A350, of which Qatar is the biggest customer.

Paris air show - orders soar

Airbus faced the unexpected and daunting task on Monday of delivering a marketing blow to rival Boeing and maintaining momentum for a revamped jet with its two flagship planes grounded at the Paris Air Show. The European planemaker has targeted an order surge worth tens of billions of dollars, but was left reeling as the world's largest aviation event was jinxed by a series of mishaps including a taxiway collision involving the A380 superjumbo. The right-hand wing-tip of a test plane for the world's largest jetliner, with a wingspan of almost 80 meters (yards), scraped a building at Le Bourget airport on Sunday and was withdrawn from the air show's traditional flying displays.

A second aircraft, the delayed European A400M airlifter, was also withdrawn from air display after a gearbox problem but will be allowed to perform in a flypast when French President Nicolas Sarkozy inaugurates the biennial event on Monday. The A380 collision caused dismay hours after the arrival of its new rival Boeing's elongated 747-8 superjumbo which is showing its distinctive silhouette abroad for the first time. The latest version of the legendary 747 jumbo touched down in orange and red "sunrise" livery symbolizing the importance of Asia, whose economic growth is set to dominate aviation in coming years starting with this week's air show. Industry sources expect some sales of both the A380 and 747-8 during the June 20-26 event but the main joust for market share concerns narrow-body, medium-haul 150-seat planes.

The air show could bring two record deals on successive days as Airbus tries to woo buyers for a revamped A320neo with more efficient engines, saving airlines 15 percent in fuel costs. "We clearly believe in the business case and the orders you are going to see at the show are going to be astounding," said David Hess, chief executive of engine maker Pratt & Whitney. Buyers are already camped out in Paris hotels to negotiate the final details of major deals but are aware that Airbus has staked a lot on winning a slew of orders for the A320neo at the Paris show, and some are said to be digging in their heels. A $16 billion provisional deal from IndiGo to buy 180 A320neo passenger jets, first announced in January, was mired in further negotiations that could spill beyond the air show. The deal if finalized would set a record for the number of planes in one transaction. But sources say if all goes to plan it is set to be eclipsed by a 200-plane order being fine-tuned between Airbus and Malaysia's AirAsia.

Demand for aircraft is on a sharp rebound driven by demand from Asia's rapidly growing airports and the Middle East. "Those two markets will enjoy at least one-third if not more of the demand increase for global air traffic in the next decade," said Philip Toy, a managing director at Alix Partners. The Airbus A320neo has also benefited from airline concerns about fuel costs. Boeing said on Sunday it would decide by end-year whether to upgrade its 737 with new engines from about 2016, as Airbus has done, or build an all-new jet in 2019. "They will sell hundreds but it is hard to tell what is gross and what is net, what is a conversion from an earlier order. There are myriad complications," said Teal Group analyst Richard Aboulafia said of the A320neo.

Orders are likely to include a confirmation of an $8 billion 100-plane order from leasing giant ILFC and another plane order for both Airbus and Boeing planes another big lessor, GECAS. But it could be Boeing that grabs attention on day one of the show with a sale of 777 wide-body airplanes to Qatar Airways -- a reminder that the two planemakers are battling for market share on a second front after Airbus revamped its A350. Russia and China will flex their muscles as potential rivals to Airbus and Boeing, especially during a Tuesday visit by Russian Prime Minister Vladimir Putin and some analysts expect surprise sales. But Western planemakers say it will be some time before newcomers mount a serious challenge in civil aerospace.

Cebu Air orders 37 Airbus aircrafts

Philippine budget carrier Cebu Air will buy 37 planes from Airbus for USD$3.8 billion as it looks to more than double its fleet over the next 10 years and expand its routes, the company's chief executive said on Thursday. Lance Gokongwei told reporters Cebu Air has put in orders for 30 new A321neos and seven A320s from Airbus with delivery between 2015 and 2021. The order is in addition to 18 A320s that Cebu Pacific is set to receive from the second half of this year up to 2014. "This is the largest single aircraft order ever made by a Philippine carrier," Gokongwei said, adding it was also the largest firm order for the A321neo in the world. "We expect to launch a flight using A321 by 2017," he said. "We will be able to serve cities in Australia, India, and northern Japan, places the A320 cannot reach."

The airline plans to use internally generated cash and may seek loans from export credit agencies and commercial lenders to fund the purchases. Cebu Air, which operates the country's largest budget airline Cebu Pacific, is a unit of Philippine conglomerate JG Summit Holdings. The airline expects to at least meet its target of flying 12 million passengers this year, up 14 percent from last year, despite rising fuel prices. It currently has 33 jets, of which 25 are A320s and eight are turbo prop planes from aircraft maker ATR. "With the A321neo, Cebu Pacific will be able to fly more people further at significantly lower cost per seat than any other competing aircraft, and with less impact on the environment," Airbus chief operating officer John Leahy said in a statement.

Cebu Air has yet to make an engine choice for the A321neo, but the choices open to it are CFM International's LEAP-X and Pratt & Whitney's PurePower PW1100G. The A321neo, the largest model in the recently launched A320neo series, uses new engines and large wing-tip devices called sharklets that would allow Cebu Pacific to achieve 15 percent reduced fuel burn, a statement from Cebu Air said. Cebu Air competes with flag carrier Philippine Airlines locally and with Singapore's Tiger Airways and Malaysia's Air Asia in the region.

AirAsia could order upto 200 A320's

AirAsia could buy as many as 200 Airbus jets in a landmark deal shaping up to dominate the Paris Air Show, industry sources said. The deal is among the most keenly awaited in a recovering civil aviation sector, and could help to determine the success of the European planemaker's efforts to stymie a draft project by rival Boeing to design a new 150-200 seat aircraft. Under pressure from airlines to provide a cushion against high fuel costs, Airbus is marketing a new version of its best-selling A320 passenger jet with new engines which it says will save 15 percent in fuel bills starting from late 2015. Malaysia-based AirAsia has said it is considering buying at least 150 of the "A320neo" aircraft as the region's largest budget carrier expands in the face of high oil prices.

But industry sources told Reuters that the range of negotiations is higher than previously expected and could reach 200 planes, trumping a 180-plane provisional order from India's IndiGo as the industry's largest ever by number of aircraft. "They are talking about 150 to 200 aircraft," an industry source familiar with the negotiations said, asking not to be named. Such a deal would be worth $14 billion to $18 billion at list prices, depending on the exact model of aircraft involved, though big plane orders tend to generate significant discounts. The record for the largest Airbus deal by value is held by Emirates airline with a $22 billion purchase in 2007.

EADS  subsidiary Airbus declined to comment. A spokesperson for AirAsia said talks were continuing. Both sides hope to announce the deal at the Paris Air Show on June 20-26 but the size of the deal and its timing remain uncertain because of the sums involved, industry sources said. AirAsia founder Tony Fernandes has set his sights on doubling the size of the nine-year-old airline to rival Southwest Airlines' fleet of more than 500 jets. The airline has already ordered 175 of the original design of A320, of which 86 have yet to be delivered.

However in a sign that the Airbus deal should not be taken for granted, Fernandes wrote on Twitter on Friday that he was asked to meet aircraft manufacturer Bombardier in Montreal. The Canadian company wants to challenge Airbus and Boeing with its CSeries planes. Fernandes has regularly broken the secretive protocol of aircraft negotiations by tweeting about the talks. Boeing is mulling whether to follow Airbus down the "re-engining" route by tinkering with its 737 passenger jet or making more revolutionary changes with an all-new plane offering even bigger fuel savings to cash-tight airlines from 2020.

"The A320neo appears to have good traction with current A320 fliers, particularly low cost carriers," said Rob Stallard, aviation analyst at RBC Capital Markets, who predicts around 300 orders for the $90-million jetliner by the end of the year. "Even if Boeing goes ahead with a clean-sheet new narrowbody with entry into service around 2020, we think most Airbus narrowbody customers will stick with the neo due to the high cost of switching providers," he added. Airline executives say a key factor for Boeing will be whether Airbus manages to convert any of its major traditional clients, especially U.S.-based ones such as Southwest.

The AirAsia order, if confirmed, could also give a much-needed boost to transatlantic consortium CFM International. Industry sources say the Cincinnati-based company is the front-runner to win a lucrative contract for the airplanes' engines, breaking a drought of orders after rival Pratt & Whitney scooped up most orders so far for the A320neo. CFM is a joint venture between General Electric and France's Safran. Pratt & Whitney has developed an engine called the Geared Turbofan with a change of architecture for the narrowbody 737 and A320 market, the largest slice of the commercial aerospace industry worth $1.7 trillion in plane sales over 20 years.

Indian Aviation expanding rapidly

India's largest private airline Jet Airways and budget carrier GoAir are in line to order $6.5 billion worth of Airbus aircraft at the forthcoming Paris Air Show, The Economic Times reported on Thursday. The financial daily quoted Jet chairman Naresh Goyal as saying that they were buying 10 A330 aircraft worth $2.5 billion as part of plans to expand its routes in Europe. GoAir is looking to order at least 50 narrow-body A320 jets worth $4 billion for short-haul domestic routes, which will be brought into service as soon as next year, the report said, quoting two sources familiar with the matter.

Both orders were still being negotiated but were in the final stages, the newspaper added, quoting unnamed sources within Airbus. A Jet Airways spokeswoman in New Delhi told AFP that she had no details on the exact nature of the orders, as Goyal was speaking on the sidelines of the recent International Air Transport Association annual general meeting in Singapore. But she added: "We're asking for just a few (aircraft) because that's in line and keeping with our growth plan."

No one was immediately available for comment at GoAir. The Economic Times said budget airline IndiGo would also push ahead with a previously announced order for 180 A320 aircraft with an estimated value of $15 billion, after signing a memorandum of understanding with Airbus last year. Air India, the state-run national carrier, is planning to take 10 A330s and 16 A320s on a rental basis, it added. Aviation has taken off in India in recent years but private airlines have been grappling with rising fuel prices and a slowdown in economic growth that has hit business.

Virgin America places firm order of 60 new Airbus 320

Virgin America today announces a firm order for 60 new Airbus A320 aircraft to be delivered starting in 2013, including 30 of the A320neo aircraft  the first commercial order for the new eco-efficient engine option. This formalizes and expands an initial commitment made at the Farnborough International Airshow in July 2010. Today's announcement of the new fuel-saving A320neo is a new development in that deal. Virgin America is the launch customer for the new eco-efficient Airbus A320neo aircraft, which promises to be one of the most fuel and carbon-efficient commercial aircraft in the world. With today's order and growth from other sources, Virgin America's fleet will more than triple in size – from its current 34 aircraft to 111 aircraft by 2019. To celebrate its growth, the airline today launches a "Sweet 60" sale on flights across its network with fares from $60, restrictions, taxes and fees applying.

The 30 current technology A320s are slated for delivery from 2013-2016. The neo option was launched in late 2010, and the 30 neo aircraft are slated for first delivery in early 2016. The A320neo will offer 15 percent gains in fuel efficiency, along with the accompanying improvements in carbon efficiency  including double digit reductions in NOx emissions. The A320neo offers reduced engine noise, lower operating costs and up to 500 nautical miles more range. Virgin Group Founder Sir Richard Branson and Virgin America President and CEO David Cush, today join Airbus CEO Tom Enders and Airbus COO Customers John Leahy, to make the announcement alongside one of the new aircraft during the Airbus annual press conference at Toulouse, France.

Delta looks to surpass Indigo - Considering 200 new single aisle jets'

Delta Air Lines Inc. is considering an order for as many as 200 jets — possibly with options for 200 more — to replace the aging fleet it uses for domestic flying. Delta said it asked several major aircraft manufacturers for proposals for firm orders for 100 to 200 planes, with options for 200 more, with deliveries to begin in early 2013. No decisions about an order have been made yet, said Nat Pieper, Delta's vice president for fleet strategy and transactions. The request went to manufacturers in late December. The new planes would replace Delta workhorses such as the DC-9-50s and Airbus A320s that it got when it bought Northwest Airlines in 2008, as well as Boeing 757-200s, which both airlines have operated. CEO Richard Anderson said in a message to employees that Delta pilots will fly the new planes, not feeder carriers. Delta has shifted flying away from feeder carriers, and has gotten rid of more than 70 of its 50-seat regional jets and 25 Saab 340 turboprops. A jet order will give Delta the size of planes it needs to be able to replace retiring airplanes and have modest growth when the economy and fuel prices support it, Anderson said. He said Delta is looking for small, medium, and large planes in the narrowbody category, meaning planes with a single aisle for passengers. Boeing Co. and Airbus, a unit of EADS, are the main manufacturers who could meet such an order, although Chinese and Brazilian manufacturers also plan new planes of the size Delta is looking for.

Earlier this week Airbus said an Indian airline made the biggest commercial jet order ever, for 180 of its A320's and A320neo's. A Delta order would have the potential to eclipse that, although Delta could also break the order up among multiple manufacturers. In December 2009, United Airlines said it would order 50 new planes, split between Boeing and Airbus.

Jet Airways sees revenue up by 15 - 20 percent in the next 5 years

Indian carrier Jet Airways expects to grow its domestic revenue by 15 percent and international revenue by up to 20 percent over the next five years, the chairman of India's largest airline said on Thursday. The airline expects higher demand driven by increasing affluence in Asia's third-largest economy, but has no plans of placing big aircraft orders, Naresh Goyal said. A day after smaller rival IndiGo placed a USD$15.6 billion order to buy 180 planes from Airbus in the largest jet deal in commercial aviation history, Goyal said Jet is following a "relatively modest" aircraft acquisition strategy. "Aircraft orders are not a problem... It's the easiest thing to do; but, can your balance sheet support it?" he asked.

Many carriers are growing their fleet as demand booms in India, where the economy is growing at nearly 9 percent. Jet Airways has firmed up an order pipeline of 29 Boeing 737s for purchase, and another 10 Airbus A330s for lease. The deliveries for both types of aircraft are expected to start in April 2012 and would continue over three years, Goyal said. Jet has placed another order for 10 Boeing 787s, deliveries of which are seen starting in fiscal year 2015, he said. Low-cost carrier and smaller rival SpiceJet in November agreed to buy 30 Nextgen turboprop aircraft from Canada's Bombardier for USD$915 million. "We have to be very careful in adding capacity... We are not running after market share and have to ensure that the bottom-line is alright," he said. Jet has added capacity of 8 to 10 percent over the last three years, he said. While passenger traffic in India grew 19 percent in the year to November last year, the country only has 400 commercial planes for a population of about 1.2 billion. By comparison, China has 2,600 planes. Jet Airways has no plans to hedge its jet fuel requirements and expects to improve its operating margins. "As we grow, our cost of operations per unit (aircraft) will go down hence we hope to increase our profitability," Goyal said.

Indigo has signed the largest jet order deal in aviation history

India's IndiGo has signed a deal for the largest jet order in aviation history, Airbus announced Tuesday. It's also the first order for Airbus' re-engined A320. IndiGo, India's largest low-cost airline, signed a memorandum of understanding to buy 30 A320s and 150 A320neos -- the A320 new engine option that Airbus launched Dec. 1, with entry into service set for 2016. "It is the largest single firm order number for large jets in commercial aviation history, and also makes IndiGo a launch customer for the A320neo," Airbus said. The order will continue to allow IndiGo to offer low fares, while reducing its costs and improving environmental performance, airline co-founders Rakesh Gangwal and Rahul Bhatia said in a news release. Airbus says the A320neo will use up to 15 percent less fuel than existing A320s, cutting up to 3,600 metric tonnes of carbon dioxide emissions a year, with a double-digit reduction in nitrous oxide emissions and reduced engine noise. Airbus is offering both CFM International LEAP-X engines and Pratt & Whitney PurePower PW1100G engines on the A320neo. The release said IndiGo would select engines at a later date. IndiGo already had ordered 100 A320s through Nov. 30, 2010 and received 37 of those, according to Airbus. John Leahy, Airbus' chief operating officer, customers, said: "This order positions IndiGo to take full advantage of the predicted growth in Indian air travel and we are delighted that they continue to build their future with Airbus."