AirAsia X could defer delivery of A350 planes - CEO

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SINGAPORE (Oct 15): Malaysian long haul budget carrier AirAsia X Bhd could defer the delivery of its Airbus A350s if European economies fail to recover by the time it receives the first aircraft in 2018 or 2019, its chief executive said.

"You can't really pinpoint it until the first one enters into service and the production schedule gets firmed up by Airbus," Azran Osman Rani told Reuters in an interview on Tuesday.

The broader economy could also be a factor, he added.

"That really is conditional on the whole European economy bouncing back, travel from Europe to Asia being in a situation where demand exceeds supply, which isn't the case now because of the recession there and a lot of capacity from the Middle East carriers," said Azran, speaking in Singapore on the sidelines of a conference organised by industry consultancy CAPA.

AirAsia X, an affiliate of Malaysian budget airline AirAsia Bhd, has 10 A350s on order. It is due to take delivery of the jets in 2018 or 2019, said Azran. This year, it also ordered 50 A330neo aircraft.

The re-engined variant of the A330 will provide lower operating costs than its existing A330s for the airline, which has an affiliate in Thailand and is close to setting one up in Indonesia.

AirAsia X, which began operations seven years ago and mainly links Kuala Lumpur to points in China, Japan, Australia and South Korea, will divide the A330s among the three affiliates, Azran said.

The A350 is Airbus's newest, most technically advanced jet. The A350-900 variant, the first to enter service, will compete primarily with Boeing's 787 Dreamliner.

Norwegian Air became the only European budget airline to operate long haul routes last year when it started flying to the United States and Bangkok from its Scandinavian bases, arguing that the Dreamliner, with a 20 percent fuel saving, made it possible.

AirAsia X tried flying between Asia and Europe with four-engined Airbus A340s, but halted that in 2012, arguing the low-cost model could not work until it got more fuel-efficient planes with a similar range.

After pioneering low-cost long haul travel in Asia and piggy-backing off the success of AirAsia, AirAsia X is waiting to see how the Nordic experiment turns out.

"We may be a follower. If the market's being created, it's much easier than pioneering a new market. Why not?"

"My immediate strategic focus is growing in depth and concentration across Asia Pacific instead of spreading thinly in going into Europe, U.S. and Africa," Azran said.