Airbus bags Asian deals as Farnborough struggles to take off

Tue Jul 12, 2016 6:06pm EDT
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By Tim Hepher and Cyril Altmeyer

FARNBOROUGH, England (Reuters) - Airbus (AIR.PA: Quote) bagged deals worth $20 billion to seize the initiative at a rain-soaked Farnborough Airshow on Tuesday, but industry executives said the mostly lackluster event confirmed a recent boom in aircraft orders was finally fizzling out.

AirAsia (AIRA.KL: Quote) Chief Executive Tony Fernandes flew into the UK to finalize an order for 100 Airbus A321neo jets to support the low-cost airline's expansion, confident of striking a deal at bargain prices as planemakers brace for a slowdown.

The 185-seat A321neo is worth $125.7 million per plane at list prices, but AirAsia is expected to pay a fraction of that after placing orders for hundreds of jets and establishing itself as one of Airbus's largest customers.

Fernandes told a news conference the A321neos were in addition to the A320neos, and not replacements. Some of the new jets would be for the Malaysian-based airline's leasing business, he added.

"With this aircraft we believe we will hit 100 million passengers in the not-too-distant future," Fernandes said, adding negotiations started over a meal in an Iranian restaurant in London last year, for which he said he paid the bill.

People familiar with the matter told Reuters on Sunday that AirAsia was studying a dual listing in Hong Kong and moving toward setting up a joint venture in China as part of plans to become a pan-Asian player.

The company said in a statement earlier on Tuesday that it was not currently pursuing any new joint venture proposals and was not formally considering a dual-listing.

But Fernandes told reporters that if AirAsia had an opportunity to be in China, "we will 100 percent be there."   Continued...

People speak together near a logo of Airbus Group during the Airbus annual news conference in Colomiers, near Toulouse, January 13, 2015.     REUTERS/Regis Duvignau/File Picture