AirAsia bets big on long-range jets with $12.25bn airbus deal to expand global reach

AirAsia has signed a $12.25 billion agreement with Airbus for 70 A321XLR aircraft, aiming to launch ultra-long-haul low-cost flights across continents, including potential one-stop services to North America.

The memorandum of understanding (MoU) includes 50 firm orders and rights to convert 20 existing aircraft into the XLR variant, marking a bold leap for Asia’s largest budget airline as it eyes global network expansion.

Deliveries are set between 2028 and 2032. With a 4,700-nautical mile range and 20% lower fuel burn, the narrowbody A321XLR will allow AirAsia to operate cost-effective long-haul flights to new markets previously unreachable with larger aircraft like the A330.

“We believe we can build the first low-cost, narrowbody network carrier,” AirAsia CEO Tony Fernandes said. “The A321XLR transforms how we think about long-haul travel – fewer risks, more destinations, and better economics.”

Currently, AirAsia has eight A321neos in service and 323 more on order. With plans to transport over 150 million passengers annually by 2030, the A321XLR will bolster the airline’s presence at key hubs in Kuala Lumpur, Bangkok, and potentially Jakarta and Manila. Tourist-heavy destinations like Denpasar and Penang are also in line to benefit from expanded point-to-point services.

AirAsia is expected to finalise another large aircraft order in the coming weeks, which could include up to 150 additional planes. Financing options include traditional sale and leaseback models, bonds, or direct purchase, depending on market conditions.

“The 380-seat aircraft was limiting. With the XLR, we can go farther with less risk,” Fernandes added, hinting at future one-stop routes from Asia to the U.S. via Japan or the Middle East. The airline previously operated Honolulu flights via Osaka.

With over 1.2 billion passengers flown since inception, AirAsia hopes to push that number significantly higher as it transitions into a global low-cost network airline, making long-haul travel more affordable and connected than ever before.

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