Airbus is inching towards finalizing a deal to sell around 100 A220 aircraft to AirAsia, with options for roughly 50 additional jets, a transaction that would mark the airline’s entry into the smaller narrowbody segment.
The aircraft would be used to complement AirAsia’s existing fleet by covering regional routes where larger A320-family jets are less efficient. The A220 would introduce a smaller-gauge option better suited for regional routes with lower demand or infrastructure constraints.
The talks come less than a year after AirAsia committed to 50 A321XLRs with options for 20 more. AirAsia is reportedly evaluating higher-density seating layouts to align the aircraft with its low-cost model.
Discussions around a possible A220 order have been ongoing for an extended period. Interest in a higher-density version of the aircraft, with seating approaching 160 passengers, was already circulating ahead of last year’s Paris Airshow, indicating that the talks have gone beyond a short-term commercial push and into detailed fleet planning.
The scale of the potential order would represent a significant commitment to a new aircraft category for the group. A confirmed AirAsia A220 order would mark a significant win for Airbus in the smaller single-aisle segment, highlighting strong demand from Asian airlines eager to diversify their fleets.
The prospective Airbus A220 order signals a strategic change in AirAsia’s fleet planning. The airline currently runs an all-Airbus A320-family operation of more than 250 aircraft.
AirAsia co-founder Tony Fernandes has said the group stands ready to diversify its fleet. He has indicated that smaller aircraft could support new route development.
Regional narrowbody planes could help AirAsia target thinner demand pockets. They could also improve economics on routes that do not justify A320-family capacity.
Those talks have not been exclusive. Over the same period, AirAsia has also held conversations with Embraer as it evaluated alternatives in the same capacity range. The Brazilian manufacturer has been seeking an opening with the airline through its E2 family, as AirAsia considers how best to serve thinner regional markets while maintaining low unit costs and operational flexibility.
The fleet discussions are taking place as AirAsia works to return to growth following several years of disruption. Management has indicated that smaller aircraft are seen as a tool to open new destinations and increase frequencies without the capacity risks associated with larger narrowbodies, while keeping the group’s fleet strategy adaptable as demand recovers across Southeast Asia.
A large Airbus A220 deal would undercut competing pitches from Embraer and China’s COMAC. AirAsia has evaluated Embraer’s E2 regional jets alongside the A220 and COMAC aircraft.
Fernandes confirmed in October that AirAsia held active discussions with COMAC. He described the Chinese manufacturer’s offerings as “a big step forward.”
Meanwhile, the fleet reinforcement talks follow major corporate restructuring at AirAsia’s parent, Capital A. The company completed its PN17 financial restructuring plan on January 23 after the pandemic-era strain.
The company is scheduled to give a pre-quarterly update around Jan. 27, ahead of its full-year results on Feb. 19, which may shed more light on management’s outlook.
AirAsia was founded in 2001 and has since grown into one of Asia’s largest low-cost airline groups, operating an extensive short- and medium-haul network across Southeast Asia and beyond.
Before the pandemic, the AirAsia Group carried more than 85 million passengers annually, supported by a fleet numbering in the hundreds and one of the region’s densest route networks.
