Saturday, December 16, 2006

AirAsia in RM5.8b Engine Deals

AirAsia in RM5.8b engine deals
By SabrY Tahir

KUALA LUMPUR: AirAsia Bhd has signed two deals worth some US$1.6bil (RM5.8bil) for the purchase of engines for the Airbus A320 aircraft and for engine service and maintenance.

The budget carrier has chosen CFM International's CFM 56-5B engines to power its 40 confirmed and 30 optional A320 aircraft. Valued at US$500mil, the purchase agreement covers 80 engines plus six spares for the confirmed orders.

CFM International is a 50:50 joint venture between General Electric Co (GE) and Snecma.
AirAsia also signed a US$1.1bil agreement with GE for the maintenance, overhaul and repair of the 86 engines for 20 years.

Speaking after the signing of the agreements yesterday, AirAsia group chief executive officer Datuk Tony Fernandes said the deals would be financed with internal funds and borrowings.

AirAsia, which took delivery of the first A320 in December last year, and has ordered 100 such aircraft.

“By June next year all our aircraft will be Airbus A320s and within three years we will have 100 aircraft. In the medium term, 100 planes won’t be enough,” Fernandes added.

He said in tandem with the unprecedented boom in travel, the airline was flying to more destinations and needed more aircraft.

“AirAsia is going to more destinations than before. We are operating in Asean – a market bigger than America and Europe, he said.

On fuel surcharge, Fernandes said AirAsia had no plans to revise it until world fuel prices stabilised.

“Our objective is not to have any more fuel surcharges,” he said.

Source : STAR
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