Sat, 25 May 2013 08:30:00 GMT | By Reuters

AirAsia to buy more planes after record orders

AirAsia plans to launch an airline in India in partnership with the Tata Group to cash in on rising demand for domestic air travel among India's expanding middle class


AirAsia to buy more planes after record orders (© Reuters)

Monaco: AirAsia, which smashed order records for Airbus jets to become Asia's largest budget carrier, could buy another 50 planes as it targets aggressive expansion in India, Chief Executive Tony Fernandes said. Discussion of an order for another 50 A320-family jets, worth $5 billion at list prices, comes weeks ahead of the Paris air show and five months after the Malaysian carrier added 100 jets to its order book to lift total purchases to 475 planes. AirAsia plans to launch an airline in India in partnership with the Tata Group to cash in on rising demand for domestic air travel among India's expanding middle class. It would start with planes already on order but potentially trigger new orders.

"We're looking at putting in almost a plane every month. We decided that sometimes when we pussyfoot around it takes too long to catch up so we decided just to go for it," Fernandes told Reuters in an interview. "We've bought a lot of planes but we're still short, we're still leasing planes at the moment, so I was right buying these planes, and we may have to put in another order...(for) 50 or something like that," Fernandes said.

Fernandes said the affiliate, AirAsia India, was recruiting to be ready to launch in the fourth quarter, subject to final clearances. He denied a report the launch had been delayed from September, saying he had always planned the final quarter. Fernandes was speaking ahead of Sunday's Formula One Monaco Grand Prix, where his Caterham racing team is trailing behind a field that includes cars of Indian drinks tycoon Vijay Mallya - whose Kingfisher Airlines has been grounded by cash shortages.

"I think we run a better airline and he's run a better Formula One team," Fernandes said, asked how his airline would make money in a market known for losses and bureaucracy. "My point is, we're two very different models. Two very different leaders and you can't compare one with the other." Fernandes said the sector's boom and bust cycle, which prompted India to open up the sector to foreign airline investors, had given way to a healthier business climate.

(Continued)
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