PARIS/SEOUL (Reuters) -Budget airline AirAsia is in negotiations with Airbus to convert some existing narrow-body plane orders to the long-range A321XLR model as it sets a path out of restructuring, two industry sources said on Thursday.
Tony Fernandes, CEO of AirAsia owner Capital A Group, told Reuters last month he was in talks to buy 50 to 70 of the latest Airbus model within one to three months, but signalled the first priority was to complete the group’s financial reorganisation.
A deal could come as early as this week when Malaysian Prime Minister Anwar Ibrahim visits Paris, the sources said. A separate source said a deal was not guaranteed.
Malaysia-based AirAsia is one of Asia’s largest low-cost carriers and one of Airbus’ largest customers, with more than 350 planes on order.
It has been steadily restructuring its order book as it faced financial difficulties after a slump during COVID-19.
Such a deal would not necessarily increase the overall size of AirAsia’s outstanding orders with Airbus but would support the industry’s longest-range narrow-body jet model, they said.
Talks for a potentially large order of smaller A220 planes have taken a backseat for now, they added.
Fernandes wants to expand AirAsia’s global reach and has said Airbus’ long-range models are an important part of that vision.
Fernandes said this week he was seeking a hub in the Gulf region. AirAsia is in talks with four locations, including in Saudi Arabia and Ras Al Khaimah, part of the United Arab Emirates, he told Dubai Eye radio.
Bloomberg News on Thursday reported that AirAsia could place orders for narrow-body jets during the prime minister’s visit but that a deal was not guaranteed.
Airbus and AirAsia did not immediately respond to requests for comment.
(Reporting by Tim Hepher, Lisa Barrington; Editing by Kim Coghill and Jacqueline Wong)
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