Southeast Asia’s AirAsia has signed a $19 billion agreement to purchase 150 Canadian-made Airbus A220-300 jets, with the low-cost carrier indicating the order could eventually double to meet future demand.

The deal, announced at Airbus’s facility in Mirabel, marks the largest aircraft order in Canadian history. AirAsia co-founder Tony Fernandes described the aircraft as “the perfect tool for our next phase of growth.”

“This order reflects our long-term discipline and the scale of our ambitions,” Fernandes said in a statement.
AirAsia, Southeast Asia’s largest low-cost carrier, said the agreement includes “strategic flexibility” to expand the commitment to as many as 300 aircraft from the A220 family in the future.

Lars Wagner, CEO of Airbus Commercial Aircraft, said the A220 jets would “open up new routes across Asia that were not feasible before.”

The agreement comes at a challenging time for the aviation industry, which is facing soaring jet fuel prices linked to the ongoing US-Israeli conflict with Iran and concerns over fuel shortages affecting airline operations worldwide.
Last month, AirAsia announced additional flight cuts and reductions in some connections, while also increasing fares by up to 40 percent. The airline said around 10 percent of its total flights had already been reduced.
Wagner noted that once the new fleet is delivered in 2028, larger AirAsia aircraft could be reassigned to long-haul operations connecting North America, Australia, and Europe.

Speaking to the Financial Times, Tony Fernandes described the jet fuel crisis as a greater challenge for global aviation than the COVID-19 pandemic.

“I thought I’d seen it all with Covid… but having seen jet fuel go up almost three times — this is much worse,” Fernandes said.

In a LinkedIn post, Fernandes defended the timing of the Airbus deal, stating that “we never waste a crisis. AirAsia grew by making bold decisions at the right moment, not the easiest moment.”

The airline industry has been heavily impacted by supply disruptions following the closure of a key Middle East waterway since March, with jet fuel costs remaining one of the sector’s biggest operational challenges.

In an interview with Bloomberg, Fernandes said he remained confident that fuel prices would eventually stabilize and continued to oppose fuel hedging strategies. Despite this stance, Bloomberg reported that the company’s shares have fallen by 35 percent. Fernandes also revealed plans to launch a new airline in the coming months.

Aviation analyst Shukor Yusof, founder of Singapore-based Endau Analytics, described the move as “very bullish on the marketplace.” He added that Fernandes is betting on the aircraft’s long-term value for AirAsia’s future growth beyond 2030.

With the latest order, AirAsia becomes the global launch customer for the A220’s new 160-seat configuration, according to Wagner.

Mark Carney, Prime Minister of Canada, who attended the announcement ceremony, said the aircraft “will be built by Canadian workers on Canadian factory floors.”

The Mirabel headquarters and manufacturing facility currently employs around 4,000 people, while another A220 production facility operates in Mobile. Canada remains the only country outside Europe to host a major Airbus manufacturing program for the A220 family.

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