Planes and Politics: Major Airbus Orders from Malaysia

On their own a pair of aircraft orders from AirAsia and Malaysia Airlines are each notable. That they are both from Airbus, and announced concurrently as part of an official state visit to France by Malaysia’s Prime Minister, makes clear that politics are also in play. But perhaps the politics don’t really matter, as the orders set the two airlines up for significant growth.

Malaysia Airlines’ Widebody Boost

Malaysia Airlines will acquire an additional 20 A330neo planes, doubling the carrier’s commitment to the type, through a firm order announced by parent Malaysia Aviation Group.

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The carrier is a long-time A330 operator, with its A330-300s dating back to the beginning of the last decade. An order for 20 of the A330neo model was signed in 2022, with four delivered so far. Six more are expected to join the fleet through the end of the year, with the remaining ten to arrive by 2028.

This follow-on order will see additional deliveries from 2029-2031, continuing a fleet modernization and growth program focused on service in the Asia-Pacific region.

This additional order reinforces our long-term vision of building a future-ready fleet that supports sustainable growth, delivers consistent value to our passengers, and strengthens our competitiveness in key markets.

– Datuk Captain Izham Ismail, Group Managing Director of MAG

As a government-owned airline the deal being announced as part of a State visit is not too surprising. Indeed, it arguably makes more sense than announcing it just a couple weeks ago during the Paris Air Show, as this way the government gets more attention for the contract.

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AirAsia Looks Long with XLR

AirAsia’s agreement will see the carrier acquire 50 A321XLRs, with options on 20 more, as it looks to expand its long-haul operations with single-aisle aircraft. The carrier says the deal – technically a Memorandum of Understanding, not a firm order – enables “a major step towards becoming the world’s first low-cost narrow-body network carrier, anchored by its multi-hub strategy.”

Perhaps even more notable than a private airline coordinating its order announcement with a government event is the delivery timeline. AirAsia expects the planes to begin arriving in 2028. Industry chatter had mostly coalesced around A320neo family delivery slots not being available before 2030ish. No word on how many will arrive when, but it is still notable that Airbus made the earlier slots work.

This is not AirAsia’s first attempt at long-haul service. The Group’s AirAsia X arm has operated A330s since 2007, and at one point had an open order for 63 more A330neo planes. Its route network in the 2010s stretched to Europe and the United States, as well as Asia-Pacific markets. Success, however, has been inconsistent at best.

The A330neo order collapsed along with the finances of the company in 2022 as COVID-19 slashed travel demand, especially in Asia where border closures and other restrictions were significant and longer-lasting than other regions.

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But that, alone, does not explain the troubles the carrier has faced with its long-haul operations. More markets have closed than are currently operated. The company’s recently launched connection to Africa via Kenya will halt later this year after less than a year of service. Making long-haul LCC service work is challenging, and AirAsia’s magic touch has not solved that challenge yet.

This time around, however, the company will attack the long-haul market with smaller planes. The A321XLRs will carry somewhere around 65% of the passenger load of the A330-900s (~230; LOPA is TBD v 377) but with significantly lower trip costs. And while the aircraft will not have the range to serve Europe nonstop nor Hawaii via Japan like the A330s did, they can open significant new markets in the Middle East, Central Asia, and more.

Speaking to the order, Tony Fernandes, CEO of Capital A and Advisor & Steward of AirAsia Group described the A321XLR and A321LR (which presumably is an option AirAsia could pivot to, but is not explicitly named in the announcement) as “game-changers,” enabling the company’s vision to “become the world’s first low-cost network carrier” with “exponential growth, connecting geographies beyond Asean, and making flying even more democratic. We gave people in Asean the opportunity to explore Asia – now we want the world to see Asean, and Asean to see the world.”

The XLRs are not slated to fully replace the A330s. They will “operate alongside AirAsia’s all-Airbus fleet of A320 Family and A330 aircraft…maintaining a low-cost model through improved route economics, enhanced aircraft utilisation and fleet efficiency.”

The carrier also touts its multi-hub strategy, with Kuala Lumpur and Bangkok as the key bases. Rumblings of a hub in the Middle East, similar to WizzAir’s Aub Dhabi operation, have swirled for some time. That would give the carrier reach into Africa and Europe with the XLRs, though not without logistical and competition challenges.

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It is also perhaps worth noting that the LOT A220 order announced at the Paris Air Show was seen by some as a political statement, while the SAS E2 order announced last week was not. So, you know, perhaps it is only politics when that’s convenient? Especially since for both of these it keeps existing fleet ops in play.