Airbus and AirAsia announce record deal for 200 planes

AirAsia chairman Tony Fernandes (L) Airbus chief executive Tom Enders AirAsia and Airbus bosses announced the deal at the Paris air show

Airbus piled up the orders at the Paris air show as it announced the largest single order of aircraft in history.

Malaysia's low-cost carrier AirAsia is buying 200 of the fuel-efficient A320neo jets, in a deal worth about $18bn (£11bn).

That eclipsed a deal on Wednesday, when India's IndiGo confirmed an order for 180 planes from Airbus worth about $15.6bn (£9.7bn) at list prices.

That deal is for 150 of Airbus' new A320neos and 30 A320s.

It follows a memorandum of understanding between the two companies signed in January this year.

'Historic deal'

Airbus said that the AirAsia deal made the Malaysian carrier its biggest airline customer for its single-aisle product line.

Altogether, AirAsia has now placed firm orders for 375 aircraft from the A320 family, with 89 already in service.

"With this historic deal, AirAsia has secured its future with the ability to meet the huge growth potential offered by the Asian market," said Tony Fernandes, chief executive of AirAsia.

Airbus, owned by EADS, has left rival Boeing far behind in terms of orders at the event, as high fuel costs increase the demand for fuel-efficient aircraft.

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Though slightly modified, the 150-seat passenger jet itself is not new. But its engines are - and they are much better than anything else currently on offer”

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The company estimates it has sold more than 700 A320neo jets so far.

"There is a possibility that we will be at 1,000 by the end of the show," said Airbus sales chief John Leahy.

According to the BBC's aerospace industry specialist, Jorn Madslien, the A320neos are proving popular because their two new engines are 15% more fuel efficient and 30% cheaper to maintain than current models.

But Airbus' success leaves Boeing with a very tough dilemma, our correspondent at the air show says.

The US planemaker's A320 rival is the 737, but the plane is very low, so fitting modern, fuel-efficient engines under its wings would be a tight squeeze.

Making it happen would require a new undercarriage, which is costly and difficult, as well as time-consuming, he says.

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