Malaysia's AirAsia Buys 10 Airbus A330s

KUALA LUMPUR, Malaysia -- Malaysia's first long-distance budget carrier, AirAsia Long Haul, signed a deal Monday to buy 10 Airbus A330s, as the company pushed ahead with plans to start flying in September to China and other Asian destinations.

The agreement to buy the A330-300 wide-bodied aircraft includes a firm order for 10 jetliners and an option to buy five more at a later date, said Raja Mohamad Azmi, chief executive of Fly Asian Xpress, or FAX, the operator of AirAsia Long Haul.

The airline was launched in January as AirAsia X, but Raja Azmi said at a press conference that it was given a new name to better reflect its business.

He declined to reveal how much the deal is worth but said the 15 aircraft cost around US$2.6 billion (euro2.2 billion) at catalog price. Aircraft makers typically give discounts.

Over the next five years, AirAsia Long Haul aims to expand its fleet to 25 A330 planes and carry some 7.5 million passengers during the period, said Raja Azmi, who joined at the press conference by John Leahy, Airbus chief operating officer for customers.

The aircraft will be delivered from the fourth quarter of 2008 through to 2011. Until then, Raja Azmi said the airline will operate with an interim fleet of one to three leased A330 aircraft, beginning September.

"Essentially we are looking at starting in the Chinese, Korean, Japanese and Australian markets," he said. "Over the next five years, we expect to have more than 20 Airbus A330s ... we intend to fly everywhere."

The statement ends speculation that the airline might put off its scheduled launch until next year when it gets its own planes.

The new airline is seen as a test of whether the highly successful low-cost airline model can be profitable on long-haul flights, which are dominated by full-service airlines.

"The acquisition of the A330 aircraft marks a very important milestone in our journey to become the world's first and most successful long haul lost cost airline," said Tony Fernandes, FAX director and chief executive officer of AirAsia, FAX's successful parent company.

FAX will "strive to make Malaysia the world's biggest low-cost hub," he said.

Fernandes said the new A330 plane, which has a range of up to 10,500 kilometers or 5,650 nautical miles, would be fitted with 389 seats in two classes. Airbus advertises the aircraft as being capable of carrying a maximum of 335 passengers in a two-class cabin layout.

AirAsia Long Haul will focus on Japan, Korea, China, India, Australia and the Middle East, with some routes in Europe, including London, he said, adding the carrier has no plans for code-sharing agreements with other airlines.

By 2030, AirAsia and AirAsia Long Haul aims to carry a total of 60 million passengers a year, Fernandes said.

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