Canadian-made aircraft seats 110 to 130 passengers, larger versions also possible
Employees work on an Airbus A220-300 passenger jet at a plant in Mirabel, Quebec, near Montreal. (Photo: Reuters)
MIRABEL, Quebec – The Malaysian budget carrier AirAsia has announced a firm order for 150 Airbus A220 jets manufactured in Canada, with 150 options to purchase a larger version of the jet if Airbus decides to produce it.
The announcement of the biggest aircraft deal in Canadian history, estimated to be worth $19 billion, was made on Wednesday at an event near Montreal.
The A220 would be “the perfect tool for our next phase of growth”, AirAsia co-founder and CEO Tony Fernandes said.
In January, Reuters reported that Airbus would start offering a larger version of the plane, called an A220-500, to airlines and leasing firms. AirAsia’s option to buy the larger plane does not involve the same level of commitment as its firm order of 150 A220s, which requires a deposit.
Fernandes said in an interview he believes Airbus will produce the larger version of the jet with 180 seats that would replace the A320 family, leaving the European planemaker to focus on its larger A321 jets.
The plane, designed originally by the Canadian planemaker Bombardier, typically seats 110 to 130 passengers.
“This plane was built to be stretched when Bombardier built it,” said Fernandes, who added that AirAsia would be the launch customer for the A220-500.
Airbus, however, is now trying to ramp up production of the existing A220 jets so it can break even on the money-losing programme it essentially took for free from Bombardier in 2018.
It has also faced pressure from the Brazilian-made Embraer E2, which won a campaign with Finnair in March, and outsold the Airbus A220 by three-to-one last year.
Airbus commercial aviation CEO Lars Wagner said the company intends to decide whether to make a larger version this year and that reaction from airline customers is positive.
“It obviously helps if we have a customer like Tony who publicly said he’s going to order another 150,” Wagner said in an interview. “I see a lot of demand.”
AirAsia is also the launch customer of a new 160-seat cabin configuration of the A220.
The government of the province of Quebec has a minority stake in the A220 programme, which is produced at a site in Mirabel, north of Montreal, and at a separate assembly line in Mobile, Alabama. A220 planes for non-US customers are produced in Mirabel.
Back to normal by July?
Airbus’s decision would come at a time when airlines are trimming flights and raising fears over shortages of jet fuel in Asia and Europe due to conflict in the Middle East.
AirAsia recently cut the number of flights due to the spike in fuel prices since the US-Israeli war on Iran disrupted global oil markets.
Fernandes said he did not think Asia would run out of jet fuel and said he hoped AirAsia would return to its normal schedule in July.
For Airbus, bringing a larger A220 jet to market is not a short-term decision.
“Once we do the decision we need obviously a bit of time to certify it, and the demand is really coming at the beginning of the next decade,” Wagner said. “So that’s a window we need to hit.”
If produced, the option for the additional 150 would replace AirAsia’s existing A320 current engine option aircraft, Fernandes said.
“So we’ll end up with a fleet of A220s which could go from 160 seats to 185 and then we’ll just focus on the A321,” he said.