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Wednesday, September 29, 2004 - Page updated at 12:00 A.M.
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$6 billion jet order waits in wings for Boeing or Airbus

By David Bowermaster
Seattle Times aerospace reporter

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AirAsia, a rapidly expanding low-fare carrier based in Malaysia, is poised to award a narrow-body jet order that could be worth more than $6 billion at list prices to either Boeing or Airbus.

Boeing recently received a final request for data from AirAsia, confirmed Bob Saling, a company spokesman.

"Our sales team is in Kuala Lumpur right now," Saling said. "They were providing information to the airline as late as last week."

AirAsia Chief Executive Tony Fernandes yesterday told ATWOnline, an airline-industry newsletter, that the carrier is "within days" of ordering either Boeing 737-800s or Airbus A320s to support its proliferating network.

Fernandes told the newsletter the deal would be for 50 firm orders and 50 options, making it larger than previously indicated. The catalog price for a 737-800 is $61.5 million to $69.5 million, but discounts are common on large orders.

AirAsia operates 19 used 737-300s equipped with 148 seats and plans to expand its fleet to 24 Boeing 737s by the end of 2004.

Reports first surfaced in June that AirAsia was preparing to request Boeing and Airbus prepare proposals for an order of 80 new narrow-body planes, including 40 firm orders and 40 options.

The decision timetable indicated by Fernandes "fits with what we've been hearing," Saling said, but he added Boeing does not know whether a decision has been made or when one might be announced.

Airbus President Noël Forgeard hinted in an interview published in a French business newspaper yesterday that the European plane maker would soon announce another in a series of high-profile wins from low-fare carriers.

"We've obtained a big part of the market with JetBlue, Independence Air, Spirit Airlines, Frontier, America West and Virgin America in the United States and easyJet in Europe and another important one which we are thinking of announcing in the future," Forgeard told Les Echos.
 
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Low-fare carriers arrived relatively late to Asia. AirAsia was one of the first when it was launched as a no-frills airline in January 2002.

Since then, Singapore Airlines is preparing to launch Tiger Airways, a low-fare affiliate; Australia's Qantas has launched JetStar; ValuAir entered the market in Singapore; and LionAir began flying in Indonesia.

Initially a domestic Malaysian airline, AirAsia now flies to Thailand, Indonesia, Singapore and Macau.

Following the aggressive pricing practices of European low-fare carriers such as Ryanair, AirAsia this month initiated service between Singapore and Phuket, Thailand, with promotional one-way fares as low as 18 cents, not including taxes and airport fees.

David Bowermaster: 206-464-2724 or dbowermaster@seattletimes.com

Contract for Mitsubishi

Boeing said yesterday it awarded Tokyo-based Mitsubishi Heavy Industries a contract to supply cargo doors for its 747-400 Special Freighter jets.

Mitsubishi Heavy already produces wing parts for Boeing's 737 and 747 aircraft, body parts for the 757 and doors for the 767. The company was also given a contract this year to make wings for 2,000 of Boeing's proposed 7E7s over 20 years.

Bloomberg News

Copyright © 2004 The Seattle Times Company

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