Record Breaking Airbus A220 Order Is Coming

AirAsia X is close to finalising the largest ever order for the Airbus A220 program, with a view to purchasing 150 of these regional jets as soon as this week.

The sizeable deal is part of a more comprehensive shift by AirAsia X, which is among the most pivotal in Southeast Asia, as it looks to move towards single-aisle operations and away from the larger A330neo following cancellations of existing orders.

The deal, which has been a long time in the making, will see the airline have an aircraft now able to serve underserved routes where its A320neo family commitment, one of the strongest across Asia, is not deemed a feasible platform to reach secondary cities.

Why The Airbus A220 Just Works

AirAsia views the Airbus A220 as another layer it lacks in its fleet, a better way to meet the evolving demand trends seen across the industry, with its fleet already comprising hundreds of A320 family aircraft. How can it take the next step and diversify away from just routes?

The 20% fuel savings offered by the A220, along with a quieter cabin and still-strong operating metrics and comfort despite its capacity drop from the upcoming A321XLR following a 2025 order, will mean tier-2 airports across Asia, including but not limited to Thailand, the Philippines, and Indonesia, will all be within reach.

For markets hungry not just for higher commercial service but, more importantly, for a budget-conscious option that has been missing, a thinner jet makes these types of routes all of a sudden possible.

Now, in a post-COVID world, AirAsia aims to carry more than 150 million passengers per year, and jets like the A220, operating throughout the day on short- to medium-haul flights, are a strong platform to build on to increase market share and connectivity across Asia.

Passengers & The Airline Benefit As Well

The sizeable contract will come with many benefits that extend beyond the airline that conducted the studies to determine the best possible aircraft to add to its evolving fleet portfolio; its passengers will see the real results.

By introducing a completely new aircraft type, flights to closer destinations can be conducted at scale, with lower fares and less congestion and reliance on larger hubs, which are already at a breaking point. These pressures are expected to worsen as demand for air travel and the population continue to rise faster than ongoing infrastructure development can keep pace with.

AirAsia’s sizeable deal will also come with a hefty discount. The list price of the contracts is not a fantastic metric for value, but it is not what airlines will pay for these types of deals. Furthermore, getting in now secures earlier delivery slots and ensures planes are delivered when the business needs them.

Passengers, as a consequence, will now not only have newer planes part of the AirAsia network but can see service to more secondary cities possible on a year-round basis, locations that saw a marginal profit or were simply not viable beyond a month or a seasonal part of the year switch to year-round thanks to the cost efficiencies the A220 offers.

Airbus Also Wins From The New Deal

A record-breaking order for a commercial aircraft is nothing to frown at, and for Airbus, the deal overhauls the backlog of its regional jet, formerly known as the CSeries from Bombardier, in the latter stages of the 2010s, a popular jet it has scaled but one that is ultimately unprofitable.

The deal will add to the backlog, secure delivery slots deep into the next decade and comes amid a continued drive to push production to 14 units a month, despite ongoing delays in engine deliveries from Pratt & Whitney and internal turbulence across manufacturing sites that have prevented this.

For Airbus, the 14 production-rate point isn’t just important for meeting customer demand; it is directly tied to turning a profit and breaking even following the investment in this regional jet. The many delays encountered have been far from ideal, but have not hindered the end goal.

Airbus views moving forward a deal from AirAsia and then eventual deployment as an excellent case study of what the model can do for South East Asia and other locations globally that operate under ultimately a similar model, all the while competing with jets like the Embraer E2 and COMAC C919, even without an answer from Boeing.