AirAsia Delays Delivery Of 8 Airbus Planes

KUALA LUMPUR, Malaysia (AP) -- Low-cost carrier AirAsia will delay delivery of eight Airbus A320-200 aircraft due for 2011 by three years, an official said Monday.

This is the second time in three months that AirAsia has deferred delivery of planes. In July, it slashed planned deliveries of eight A320 planes due for 2010.

AirAsia will now defer a third or 16 out of 48 plane deliveries scheduled over the next two years, as the global economic crisis takes a toll on Southeast Asia's largest budget carrier.

"We will defer eight of the 24 deliveries for 2011. We got the deferment from Airbus," AirAsia Chief Executive Tony Fernandes told The Star. All the planes will now be delivered in 2014, he said.

Fernandes couldn't be immediately reached. An AirAsia official confirmed Fernandes' comments but couldn't give further details.

The airline has firm orders for 175 Airbus A320 single-aisle planes, to be delivered up to 2014, as part of fleet replacement and expansion. Sixty-three of the planes have been delivered so far.

Analysts said the delayed deliveries would help ease the financial burden on AirAsia. Although it benefited from the economic downturn as passengers sought bargain fares, revenue per seat has remained soft and a real travel recovery isn't expected any time soon, they said.

"We view this as a positive development. AirAsia is matching capacity or fleet size closer to industry demand trend," said Muhamad Khair Mirza, an analyst with Aseambankers.

Fernandes also attributed the plane deferment to concerns that a new 2 billion ringgit ($578 million) low-cost air terminal to be built in Malaysia may not be completed on time by late 2011, the Star said.

AirAsia was concerned about its ability to continuing growing because the existing terminal can accommodate only 15 million people annually and has insufficient aircraft parking bays.

The new terminal, which will be located nearby the main Kuala Lumpur International Airport, will have an initial capacity to handle 30 million passengers a year, which can be expanded to 45 million people, as well as 70 aircraft parking bays.

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