* Airline has 349 A321neos, 13 A320neos on order but not
delivered
* Six jets earmarked for AirAsia up for sale by Airbus
-sources
* AirAsia to lower costs by at least 30% in 2020
(Recasts and writes through, adding detail and context)
By Liz Lee, Jamie Freed and Tim Hepher
KUALA LUMPUR/SYDNEY/PARIS, April 29 (Reuters) - AirAsia
Group AIRA.KL , one of Europe's top five corporate export
customers, will stop taking deliveries of Airbus AIR.PA jets
this year and review its remaining orders as the coronavirus
crisis heaps pressure on the Malaysian carrier.
The comment from Asia's largest budget airline on Wednesday
is the latest sign of pandemic-induced havoc, further denting
growth in South East Asian jetliner demand that was already
feeling the effects of overcapacity.
After years of expansion, AirAsia expects to end 2020 with
242 aircraft in its fleet, down one from last year, Executive
Chairman Kamarudin Meranun said in a statement.
The carrier is one of Airbus's largest customers, with
orders for 349 A321neo jets and 13 A320neo planes yet to be
delivered to the main airline. They would be worth about $46
billion at today's list prices, though in practice airlines win
discounts above 50% for such large orders, market sources say.
AirAsia has ordered a total of more than 660 Airbus jets
since switching from a small Boeing BA.N fleet more than 15
years ago.
But in a rare move, industry sources have told Airfinance
Journal and Reuters that Airbus recently put six planes up for
auction after giving up on AirAsia taking delivery. The delivery freeze reflects mass groundings of AirAsia jets
because of quarantines and travel restrictions, as well as the
impact of unfavourable fuel hedges, analysts said.
CHILLED RELATIONS
It also comes amid signs of a severe chill in relations
after the airline was drawn into a long-running Airbus bribery
scandal before being cleared by local investigators.
As part of a broader settlement with Airbus in January, UK
prosecutors alleged that a $50 million sponsorship deal in 2012
between a now-defunct racing team co-owned by AirAsia founders
and former Airbus parent EADS had influenced aircraft orders.
Kamarudin and CEO Tony Fernandes, who both stepped aside
during investigations, both strongly denied any wrongdoing and
were reinstated last month after an independent Malaysian review
cleared the procurement process.
Several sources familiar with the case have said the
handling of the affair soured relations between AirAsia and its
exclusive supplier.
"It is the end of the special relationship between Airbus
and AirAsia," said a source familiar with the matter.
Fernandes could not be reached for comment and AirAsia did
not immediately respond to a request for comment. Airbus said it
does not comment on discussions with individual airlines.
Airbus on Wednesday reported an 8 billion euro cash drain
in the first quarter, including a record 3.6 billion euro fine
to settle the wider multinational corruption investigations.
AirAsia said it resumed domestic flights in Malaysia on
Wednesday and hoped to do so in Thailand, the Philippines and
Indonesia in May, subject to approval from authorities.
It also said it had restructured most of its fuel hedges,
struck when oil prices were higher, and that it was cutting
employee costs, renegotiating contracts and cutting back on
non-essential spending to lower costs by at least 30% this year.
Fernandes this month said that the airline was in talks with
the government for a loan to help it to ride out the crisis.
Sources have also said that AirAsia is among suitors for a
deal with Malaysia Airlines as the government seeks a strategic
partner for its national carrier.
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Airbus Q1 profit plunges as coronavirus crisis starts to bite
ID:nL5N2CH0KW
Malaysia's AirAsia says review found Airbus procurement process
robust ID:nL4N2BD1LQ
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