AirAsia inks RM27b deal for 100 engines

AirAsia inks RM27b deal for 100 engines

PARIS - AirAsia yesterday inked a deal worth US$8.6 billion (S$11 billion) for the supply of engines to power 100 Airbus A320 air-craft that it had ordered in December.

The deal, signed with CFM International, was for Leap-1A engines to power 64 A320neo aircraft, CFM56-5B engines for 36 A320ceo aircraft and five spare sets of CFM56-5B engines and nine spare sets of Leap-1A engines.

It also includes a 20-year rate per flight hour agreement under the terms of which CFM guarantees maintenance costs on a dollar-per-engine flight hour basis.

AirAsia group deputy chief executive officer Datuk Kamarudin Meranun said the airline was pleased to expand its orders for the Leap and CFM56 engines.

"CFM has been one of the elements that has helped power our growth over the last decade and we are happy to work with CFM to strengthen AirAsia's expansion plans," he said at the Paris Air Show in Le Bourget.

In Le Bourget two years ago, AirAsia had announced a deal for Leap-1A engines for 200 A320neo aircraft.

AirAsia chief executive officer Aireen Omar signed on behalf of the airline. while CFM parent company GE Aviation's vice-president for sales Kevin McAllister represented CFM International.

Aireen said AirAsia was confident of the Leap-1A and CFM-56B engines as they were effective in terms of cost and efficiency. She said the engines would also be used for aircraft destined for the airline's latest joint-venture, AirAsia India, which is expected to be launched by the end of the year.

McAllister said CFM and GE appreciated AirAsia's continued trust in CFM engines.

"We are looking forward to a great future with AirAsia and to working hard each day to prove to them that they have made the right choice."

AirAsia is CFM's biggest customer in Asia, where there are more than 6,000 sets of its engines operating.

"Asia is an incredible growth market and AirAsia commands terrific strength in moving people across Southeast Asia especially," said McAllister.

AirAsia currently operates 137 A320 aircraft.

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