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Monday, July 4, 2011

Now Every One Can Fly Even More..........

Where will AirAsia fly with all its future Airbus deliveries.

Even before AirAsia placed its mega-order for 200 Airbus A320neo aircraft at the Paris Air Show, the carrier already had outstanding orders for a further 86 ‘basic’ A320s as well as currently operating 89 A320s (53 by its Malaysian airline, 20 by Thai AirAsia and 16 by Indonesia AirAsia). So what is the airline group going to do with all these next-generation A320s when they start being delivered at the rate of around 12-15 per year from 2016?
Besides simply using the new aircraft to phase out older aircraft, there are many current indicators to confirm that much new capacity will be needed to absorb growth. During the last 12 months the AirAsia group fleet has grown from 85 to the current 93 units (which still includes four 737-300s in Indonesia). At the same time passenger numbers grew 13% from 22.7 million in 2009 to 25.7 million in 2010. In the first five months of 2011 the airline has seen passenger growth accelerate to 20.2%, to just over 12 million, suggesting that the airline is well on course to carry over 30 million passengers in 2011.
The size of AirAsia’s order and no doubt some flexibility on timing, combined with how quickly it decides to refresh its fleet, combined with underlying market conditions (such as fuel prices), the pace of further liberalisation, and additional joint venture decisions, will determine how quickly AirAsia actually grows. But having secured such a large order (and volume normally equates to discounts even when buying ultra-expensive things like aircraft), and a track record of solid profitability, the indications are that AirAsia will continue to be the region’s biggest low-cost carrier and will be able to deliver its promise that “Now everyone can fly” to well, pretty much everyone.
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