AirAsia Hands Aviation Some Awesome, and Not Just With Order of 100 A321neos

AirAsia signed a deal for 100 A321neo planes with Airbus at Farnborough yesterday which was a powerful vote of confidence in the European plane manufacturer’s ambitious next generation single-aisle program.

Efficient and passenger-friendly, it’s a plane that works well for the Asian low-cost leader’s planned growth.

Tony Fernandes, AirAsia Group Chief Executive Officer said of the contract:

“AirAsia Group currently operates close to 1,000 flights per day to more than 120 destinations in 24 countries. We recorded a robust load factor of 85% in the first quarter of 2016, up 8 percentage points from the same period last year, and we are confident of maintaining this momentum going forward. The A321neo will help us to meet ongoing strong demand as well as further reduce our cost per Available Seat Kilometre across the group, which will translate to lower air fares for our guests. We would like to congratulate Airbus for producing the state-of-the-art A321neo aircraft that meets our requirements for efficient operations.”

He added, “The A321neo will be operated on our most popular routes and especially at airports with infrastructure constraints. It will allow us to bring higher passenger volumes with the same slots, therefore providing immediate benefits to the airports. These include, among others, more efficient operations, higher revenues from passenger service charges, and more airport retail purchases. We will also continue to maintain our 25-minute turnaround with two- or three-step boarding where permitted to ensure on-time performance.”

All the Singles, Flap Your Wings

An order for 100 of the single aisle planes looks very good for Airbus even if Boeing is right about Airbus’ larger plane models.

Airbus and Boeing agree that more airlines will buy single aisle planes than any other planes.

Airbus expects 23,530 of all planes sold by 2035 (33,070) will be single-aisle planes. Boeing expects it to be 28,140 single aisles out of 39,620 planes required in all by 2035.

This strong vote for the A321neo from a low-cost leader is very good news indeed for Airbus, but there’s much more to this–less to do with A vs. B and much more to do with 29A vs 13B.

You’re Going to Want to Sit Down for This

Also announced yesterday, though perhaps with a bit less fanfare, was Mirus Aircraft Seating’s “first of” international expansion plans.

You’ll remember Mirus Aircraft as the scrappy newcomer to aviation, which got a big boost from Tony Fernandes with a major order at the Aircraft Interiors Expo earlier this year to retrofit eight existing A320s and ALL NEW A320neos.

Mirus will deliver the industry’s first Formula 1 inspired aircraft seat. For you and me and everyone else flying this seat means just about what every other slimline seat today means–with a few nice comfort features–Plus Formula 1.

For the industry this means so much more.

It means finally another credible supplier emerging who can supply what will be a ridiculous amount of aircraft interiors demand to meet over the next 20 years.

Whichever aircraft projections are right (and we can expect reality to fall somewhere between what Airbus and Boeing say) there will be hundreds of thousands of seat orders to fill–a doubling of today’s entire market in new seats. That’s before we consider replacement seats and there will be a lot more seats to replace than planes to replace in 20 years.

We can expect that the existing seat market will need replacement or repairs within 10 years of when they started service. That’s at least twice over by the time all these new planes enter service.

Seat manufacturers and their suppliers today must be experiencing a weird mix of relief, joy, anxiety, hypertension, and excessive salivation. It. Has. Never. Been. Like. This. Before.

We don’t have an established “what you do” plan for these market conditions. The aircraft interiors industry has to redefine its strategies and reorganise/streamline its operations, at the same time that it keeps up with all this new newness.

We need existing seat suppliers to sort themselves out and we need more suppliers.

Otherwise, planes will be standing by waiting for parts and the future will be a bit of a mess.

Enter Tony Fernandes and Mirus. The British seat manufacturer will open new facilities in Malaysia, under the firm name Mirus Aircraft Seating Malaysia SDN BHD.

Initially, this facility will be sales and service centre, providing technical support to Air Asia “as well as other customers in the region”, and may ultimately become a second manufacturing facility “and centre of excellence for projects in South East Asia” helping Mirus keep up with growing demand, improving lead times, and lowering production costs.

Phil Hall, CEO at Mirus said, “I’m really happy we’re able to announce this significant milestone at Farnborough.  It’s an exciting new step in the Mirus story and will demonstrate to customers our commitment to providing them with outstanding support”.

For the time being, this AirAsia A321neo order is also good news for British aviation and aerospace as it means more immediate demand for more Mirus seats which will be built exclusively in the UK until Mirus sorts out that second production facility and will keep producing after that happens to keep up with demand and stay close to the delivery centre at Airbus.

If this is all managed well, and eyes are kept on production quality throughout, then the industry just got a major boost for a startup which could see Mirus establish itself as a good-sized seat manufacturer in the years ahead.

But Wait..There’s More

Of course, this is just the news from AirAsia, Airbus, and Mirus.

The market growth projected for the next 20 years in single aisle planes will include sales of the 737. This brings us to another cool new manufacturer: LIFT.

Boeing announced that LIFT would be the exclusive seat of the 737 Boeing Sky Interior cabin during Aircraft Interiors Expo in Hamburg this Spring. Boeing’s 737 announcements so far in Farnborough are distributed among smaller orders, but they add up giving LIFT a boost too.

• 30 737 MAX to Xiamen Airlines (MoU)
• 25 737 MAX to Donghai Airlines (Intent)
• 10 737-800s to Standard Chartered (Lessor, Order)
• 10 737 MAX to Kunming Airlines (MoU)
• 10 737 MAX to TUI Group (Prev. Order finalised)
• 6 737 MAX to ALC (Order, Lessor)
• 30 737 MAX commitment from Unidentified Chinese Customer
• 9 737-800s to EGYPTAIR (Order)

Airbus has announced other single aisle orders, beyond the 100 A321neos from Tony Fernandes. Those orders will benefit the other established seat manufacturers in the industry.

At the end of the day, it’s a big party and everyone’s invited. Just mind the inevitable hangovers.

As we prepare for massive growth over the next 20 years, we need to keep our eye on interiors market diversification.

Remember, planes are pretty useless without the ‘pretty fluff’ that many take for granted.