Airbus Lands Record AirAsia Deal as Budget Carrier Bets Big on A220 Jets

The Financial Times, Airbus, BBC, and Reuters contributed to this report.

Malaysian budget airline AirAsia has agreed to buy 150 A220-300 jets in a deal valued at roughly $19 billion at list prices, giving Airbus a major win for its Canada-built aircraft and pushing total A220 orders past the 1,000 mark.

The announcement was made at Airbus’ Mirabel facility near Montreal, where the A220 is assembled for customers outside the US It also hands AirAsia a new role inside the program: the airline will become the launch customer for a redesigned 160-seat cabin layout that squeezes in 10 extra seats through the addition of new overwing exits.

For AirAsia founder Tony Fernandes, the order is about expansion as much as efficiency.

“The A220 unlocks new markets and routes,” Fernandes said, calling it another step toward building what he described as the world’s first true low-cost network carrier.

The airline already flies an all-Airbus fleet, but the smaller A220 gives it more flexibility than its larger A320 jets. AirAsia plans to use the aircraft on routes across Southeast Asia and into Central Asia, while freeing up bigger planes for longer-haul flights.

The deal also comes with a major twist: AirAsia secured options for another 150 aircraft if Airbus moves ahead with a stretched version of the jet, widely expected to be called the A220-500.

That future model has become one of the most closely watched projects in commercial aviation. Airbus executives have hinted for months that a decision could come this year, and Fernandes is openly pushing for it.

“This plane was built to be stretched,” he said in an interview after the announcement.

He added that AirAsia would likely become the launch customer for the larger variant if Airbus gives it the green light.

The A220 began life as Bombardier’s CSeries program before Airbus took control in 2018. Since then, the European manufacturer has tried to turn the jet into a stronger competitor against Brazil’s Embraer and even parts of its own A320 family.

The aircraft carries between 100 and 160 passengers, offers lower fuel burn and longer range than many rivals, and has become increasingly attractive to airlines trying to balance fuel costs with thinner regional demand.

That matters right now. Airlines across Asia and Europe are grappling with rising jet fuel prices tied to the Middle East conflict and disruptions around the Strait of Hormuz. AirAsia itself recently trimmed flights because of fuel pressures, though Fernandes said he expects schedules to normalize by July.

For Airbus, the order is also a big boost to its operations in Belfast, where the A220’s wings and mid-fuselage sections are produced. The factory remains one of Northern Ireland’s largest manufacturing employers and has become central to Airbus’ plans to ramp up A220 production.

Airbus commercial aircraft chief Lars Wagner said customer interest in a larger A220 has been strong, especially with AirAsia publicly signaling it could double down on orders later.

“It obviously helps if we have a customer like Tony who publicly said he’s going to order another 150,” Wagner said.

The timing is useful for Airbus. The company has been trying to scale production of the A220 program fast enough to finally make it profitable while fending off pressure from Embraer’s E2 jet family, which outsold the A220 last year.

Now Airbus has something it badly wanted: a massive public endorsement from one of the world’s best-known low-cost airlines.