Airbus has scored an Air Asia order for 100 of its A321NEO single aisle jets at the Farnborough Airshow, sending messages not just to rival Boeing, but the low cost carrier sector in general as to the optimum size for airliners in that sector as it continues to expand.
Those LCC competitors who compete directly with the Malaysia based franchise will soon have to deal with 240 seat A321s with lower seat kilometer costs than the more widely flown 180-200 seat equipped smaller Airbuses and Boeing 737s.
Air Asia is doing what the Jetstar franchise has done for years on a much smaller scale in operating densely seated A321s alongside A320s. Scale is however the key to this clash of the leading low cost carriers in the Asia-Pacific, with the scope of the Air Asia network making it larger than the Indonesian Lion and Singaporean Tigerair and Australian Jetstar franchises.
Over 170 A320s have already been delivered to the airline and are flying with its units in Malaysia, India, Indonesia, Japan and the Philippines.
Tony Fernandes, AirAsia Group Chief Executive Officer said. “We currently operate close to 1,000 flights per day to more than 120 destinations in 24 countries. We recorded a robust load factor of 85% in the first quarter of 2016, up 8 percentage points from the same period last year, and we are confident of maintaining this momentum going forward. The A321neo will help us to meet ongoing strong demand as well as further reduce our cost per Available Seat Kilometre across the group, which will translate to lower air fares for our guests. We would like to congratulate Airbus for producing the state-of-the-art A321neo aircraft that meets our requirements for efficient operations.”
Fernandes said, “The A321neo will be operated on our most popular routes and especially at airports with infrastructure constraints. It will allow us to bring higher passenger volumes with the same slots, therefore providing immediate benefits to the airports. These include, among others, more efficient operations, higher revenues from passenger service charges, and more airport retail purchases. We will also continue to maintain our 25-minute turnaround with two- or three-step boarding where permitted to ensure on-time performance.”
While Air Asia is an established Airbus customer, the order underlines the limitations of the Boeing single aisle family, where it new engine technology 737 MAX 9, which is almost as large in capacity as the A321 NEO has been relegated to a distant second in terms of sales.
The problem for Boeing is that the MAX line up doesn’t give the same options as Airbus does to airlines to trade up to a larger capacity single aisle jet. Boeing has floated a number of options to change the situation, with a MAX 10 model, and costly changes to the engines and a revised undercarriage.
But despite all the talk, no firm proposal for action has yet gone to Boeing’s board for approval, and its customers remain without something they can buy that would have the A321 NEO’s capabilities.