Airbus unveils £3bn contract with AirAsia

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Airbus indicated it would stay ahead of Boeing on deliveries this year as the European aircraft maker unveiled a £3bn contract with Asia's largest budget airline for up to 100 new planes.

John Leahy, chief operating officer in the company's commercial division, said he was not concerned by Boeing overtaking the company on new orders in 2006 for the first time in five years. "Deliveries appear to be ahead of the Boeing level and this will probably stay that way in 2007," he said. "This is a duopoly, we expect to have between 40 to 50 per cent of the market share. If we had 70 to 80 per cent then we would be concerned."

He signalled that total sales, to be announced on 17 January, would be better than predicted. Mr Leahy signed a contract yesterday with Tony Fernandes, the chief executive of AirAsia, for 50 new A320s plus the option to buy 50 more.

Mr Fernandes, who bought the Malaysia-based AirAsia in 2001 for a nominal fee and transformed it into the region's leading low-cost carrier, said his company would be the second largest A320 operator in the world by 2012. The first aircraft is scheduled to be delivered in 2008.

Last week, Mr Fernandes announced his investment in a new long-haul, low-cost service to be operated by FlyAsianXpress (FAX), another Malaysian airline, in which he has a 50 per cent interest. The service, called AirAsia X, will begin flying between Kuala Lumpur and the UK from July.

Mr Leahy added that Airbus, part of pan-European aerospace company EADS, was committed to the delivery of the A380, which suffered a damaging setback when engineers discovered problems with its cabin wiring system.