AirAsia Selects CFM56-5B To Power A320S In $750 Million Order

June 13, 2005

PARIS, FRANCE June 13, 2005 AirAsia, the leading low fare no frills airline in Southeast Asia, has finally unveiled its engine choice for its 100-aircraft Airbus A320 order (60 firm, 40 purchase rights). The airline has selected CFM International's CFM56-5B engine to power the A320s scheduled to begin joining the AirAsia fleet as early as December 2005. The purchase agreement for the firm engine order, which covers a total of 120 engines plus 9 spares, is valued at approximately USD $750 million at list price.

An official signing ceremony was held between both parties at one of largest aerospace events of the year, the 2005 Paris Air Show at Le Bourget. The purchase agreement signed between Pierre Fabre, president and Chief Executive Officer of CFM International, and Tony Fernandes, Group Chief Executive Officer of AirAsia Berhad, was witnessed by the Deputy Prime Minister of Malaysia, YAB Dato' Sri Haji Mohd Najib bin Tun Haji Abdul Razak and the Minister of Transport Malaysia, YB Dato' Sri Chan Kong Choy.

CFM International (CFM), a 50/50 joint company between Snecma (Safran Group) and General Electric Company, is the world's leading supplier of commercial aircraft engines, with more than 15,000 in service worldwide.

"We are very excited by AirAsia's selection of the CFM56-5B to power its future A320 fleet," said Fabre. "The decision reaffirms the -5B's position as one of the most reliable engines in the world."

AirAsia, which is Malaysia's second national carrier and Asia's first low fare budget airline, began operation in 2001. Today, the airline operates a fleet of 26 Boeing 737-300s powered by the CFM56-3 engines, serving more than 51 domestic Malaysian and regional routes to Thailand, Indonesia, China, Singapore, and the Philippines, from hubs in Kuala Lumpur and Johor Bahru, in Malaysia, Bangkok (Thailand) and Jakarta (Indonesia). The new A320-200s will support the airline's aggressive growth and expansion program.

AirAsia, which has become the single largest Airbus A320 operator in the Asia-Pacific region with this recent aircraft order, would operate a mixed fleet during the transition from Boeing 737-300s to the Airbus A320. The 180-seat A320s will enter the fleet from 2005 until 2011.

"We believe in aligning ourselves with the best. While cost is of an essence to the nature of our business, there's no denying that the beauty of the CFM56 engines lies not only with its high reliability and long on-wing life, but of its ability to complement the A320," said Fernandes. "These attributes, coupled with CFM's reputation as one of the leading suppliers of commercial aircraft engines, would only serve to drive our cost structure downwards and effectively give consumers a very good product and value for their money."

The high reliability, long on-wing life, and low maintenance costs of the CFM56-5B makes it extremely popular with leasing companies, low-cost carriers, and major airlines worldwide. More than 1,700 CFM56-5B engines have been delivered to date, and the fleet is growing at a rate of about 20 engines per month.

Primary factors behind the engine's broad-based market acceptance include reliability rates among the best in the industry (with a 0.001 in-flight shutdown rate) durability, and low cost of ownership brought about by the engines simple, rugged architecture. On average, CFM56-5B engines have a maintenance cost advantages of nearly $2 million per engine over a 15-year period versus the competition. The CFM56-5B is the only engine that can power every model of the A320 family keeping the same bill of materials, giving airlines a distinct commonality advantage.

Jamie Jewell

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Charles Soret

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Perry Bradley

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Talal Ahmed Almahmood

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