AirAsia favours Airbus planes

Malaysia's AirAsia is leaning towards European aircraft maker Airbus for an order of up to 80 short-haul planes, a source close to the airline said on Monday, in what would be another blow to rival Boeing. News of AirAsia's likely deal with Airbus that could be worth up to $5.2 billion came days after Air Berlin, Germany's second-biggest carrier, agreed to order 70 Airbus A320s worth as much as $4.5 billion with Austrian partner airline Niki.
AirAsia, one of Asia's largest budget carriers, declined to comment. The firm's entire fleet is currently made up of Boeing planes. It has just completed its initial share offer and is due to list on the Malaysian market on November 22.
Airbus also declined to comment. "We do not speculate on future orders," an Airbus spokesperson said.
"We have not finalised but it looks more like Airbus because they have more flexibility to be competitive in the whole package," said the source, who declined to be identified.
The Wall Street Journal, citing sources familiar with the order, said on Monday Airbus's offer was priced well below Boeing's bid.
AirAsia plans to place 40 firm orders and another 40 options for delivery from 2006.
The source did not indicate which engine maker would supply the engines for the planes.
The short-haul A320 seats 150 in two-class configuration or 180 in single-class and is powered either by General Electric Co's aero-engine venture CFM International or Pratt & Whitney's International Aero Engines.
The plane has a list price of $45-$65 million.
"The management has to take into account other costs in changing to Airbus, such as spares and pilot re-training," the source said.
Airbus and Boeing are currently at the centre of a trade dispute over state aid, which has seen the United States and the European Union file cases at the World Trade Organisation.
Airbus is 80 percent owned by the European Aeronautic, Defence and Space Co and 20 percent by Britain's BAE Systems.
An IPO by AirAsia raised $226 million, less than expected after institutional investors balked at the price on concerns over high oil prices and competition from rival low-cost carriers such as Singapore Airlines'.
AirAsia is controlled by a group of investors including Chief Executive Tony Fernandes, one of its founders.