AirAsia Opts for Small Airliners, Cancels A330neo Order

• Industry sources suggest AirAsia is considering up to 150 Airbus A220 jets, larger than previously reported
• The shift from widebody A330neo jets to smaller regional aircraft reflects a strategic pivot toward targeting Asia's growing first-time traveler market
• The announcement follows parent company Capital A's recent restructuring of its aviation operations

AirAsia Shifts Fleet Strategy, Cancels Widebody Order for Regional Jets

Key Developments:

AirAsia X announced a major strategic shift on February 11, canceling its pending order for 15 Airbus A330neo widebody aircraft in favor of a significant order for smaller regional jets. CEO Tony Fernandes, head of parent company Capital A, stated the airline will instead order either Airbus or Embraer regional aircraft, with the decision to be announced within the next month.

Order Details:

Industry sources indicate AirAsia is considering up to 150 Airbus A220 jets, though Fernandes suggested the actual order could be "bigger than reported." The carrier is choosing between Airbus and Embraer regional models as it focuses on expanding routes targeting Asia's first-time travelers.

Corporate Context:

The announcement follows Capital A's recent restructuring of its aviation arm. Fernandes made the comments during an interview after revealing plans to launch a new low-fare operation in Bahrain, signaling continued regional expansion.

Market Implications:

This fleet strategy pivot reflects a broader shift toward shorter-haul, point-to-point travel in Asia's budget airline market. The cancellation of the A330neo order represents a retreat from long-haul operations, while the potential A220 order would be one of the largest for the Airbus narrowbody family. The decision could impact Airbus's widebody sales pipeline while significantly boosting its regional jet program. For the Asian aviation market, this signals growing confidence in intra-regional travel demand and the continued growth of budget carriers catering to emerging middle-class travelers.

The move positions AirAsia to compete more effectively in the high-growth short-haul Asian market rather than long-haul international routes.