November 9, 2018 / 4:24 AM / 6 days ago

AirAsia X considering switching part of Airbus order to narrowbody jets: CEO

SINGAPORE (Reuters) - AirAsia X Bhd (AIRX.KL), which has yet to firm up a tentative order for 34 Airbus SE (AIR.PA) A330neo widebody jets placed in July, is considering switching some of those jets to narrowbody A321neos, the CEO of its Malaysian arm said on Friday.

FILE PHOTO: An Airbus A330neo commercial passenger aircraft takes off in Colomiers near Toulouse, France, July 10, 2018. REUTERS/Regis Duvignau/File Photo

“This is something the team is discussing,” Chief Executive Benyamin Ismail told reporters on the sidelines of a CAPA Centre for Aviation conference.

He said the number that could be switched to A321neos had not been decided, adding the aircraft could be used in smaller markets where widebodies were too big or in off-peak seasons.

The A330neo has a list price of $296.4 million each compared with $129.5 million for the smaller A321neo, though airlines typically receive large discounts from manufacturers.

A switch to narrowbodies would be a setback for Airbus’ A330neo program, which has been hit by a series of market losses to the rival Boeing Co (BA.N) 787.

AirAsia X is the largest customer for the A330neo, which is more fuel efficient than the older A330ceo jets that are part of the airline’s fleet at present.

Ismail said the deal signed with Airbus in July for 34 A330neos was a memorandum of understanding that had yet to be signed off on by the company’s board, but an earlier order for 66 A330neos was firm, with deliveries set to start by the end of 2019.

In July, Airbus called the deal for 34 more A330neos “firm”, which observers said usually means approvals have been received and deposits paid. But the manufacturer has yet to place the deal in its order book.

Ismail said the airline had yet to rule out the future purchase of Boeing Co (BA.N) 787s as a result of potential problems with the Rolls-Royce Holdings PLC (RR.L) engines on the A330neo.

Similar Rolls-Royce engines on the 787s have had significant issues requiring maintenance fixes. AirAsia X would consider buying 787s with General Electric Co (GE.N) engines, Ismail said.

AirAsia X founders Tony Fernandes and Kamarudin Meranun last week stepped down as co-CEOs of the group, which has offshoots in Malaysia, Thailand and Indonesia. They will remain non-executive directors.

Nadda Buranasiri, head of the Thai arm since 2014, was appointed as new group CEO.

Ismail said there were no plans to merge short-haul airline AirAsia Group Bhd (AIRA.KL) with AirAsia X even though it was possible both groups could operate narrowbody jets in the future.

Reporting by Jamie Freed; Editing by Muralikumar Anantharaman and Christopher Cushing

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