Airbus will supply 150 jets to Malaysia’s AirAsia in a multi-billion dollar deal
Airbus Canada has signed a deal to supply AirAsia with a large order of its Canadian-made A220 jets in a multibillion-dollar shakeup of the Quebec airline industry.
The deal with the Malaysian low-cost airline marks the largest order for a single firm of narrow-body aircraft – assembled north of Montreal in Mirabel – in the manufacturer’s history.
The first A220-300 is expected to enter the line in the first quarter of 2028, said AirAsia CEO Tony Fernandes.
For Lars Wagner, who heads the commercial aircraft division at Airbus, the agreement underscores Quebec’s role as an important global aviation hub. The French subsidiary bought most of Bombardier’s C Series in 2018 and renamed it the A220.
“Government support is at the heart of the innovations we see in this hangar, and we don’t take this for granted,” said Wagner.
Prime Minister Mark Carney, who spoke at the announcement on Wednesday, held up the agreement as an example of the benefits from trade diversification beyond the United States.
This agreement strengthens the links between Canada and Southeast Asian countries, he said, recalling a meeting he had with the CEO of AirAsia in the Malaysian capital of Kuala Lumpur last fall.
“We shared the idea of deepening the relationship between those countries, in this crisis that we are still facing, that choose to build in the face of difficulties – countries that hope to open up, to connect their economies, to invest in their workers, to move forward, not to go back,” said Carney to the audience at the Mirabel center.
“Thank you for the trust you put in the workers of Canada, Quebec, Mrabel. You choose the best at the right time,” the prime minister told the CEO of AirAsia, who was present on Wednesday.
Airbus has faced production challenges at its Montreal facility in the past few years, struggling to churn out more than seven jets a month on average – half the threshold needed to break even.
The French company pointed to a series of supplier problems, citing shortages that run the gamut from wings to Pratt & Whitney engines.
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“The jury is still out on whether the Canadian product that Carney is consuming can be produced at a cost that is profitable for manufacturers,” said John Gradek, who teaches aviation management at McGill University.
Airbus Canada CEO Guillaume Chevasson told reporters Wednesday that the program remains “miles away” from turning a profit. It aims to produce 13 aircraft per year by early 2028.
All of AirAsia’s 150 aircraft will be assembled at the Mirabel facility, Chevasson said.
The facility now employs nearly 5,000 workers, 2,500 of whom were hired in the past four years.
“In addition to showcasing us on the international stage, the aerospace industry has the potential to bring new money to our economy while providing tens of thousands of workers with a livelihood,” said Éric Rancourt, representative of the International Association of Machinists and Aerospace Workers union in Quebec, in a statement.
After the announcement, Carney and Wagner helped the AirAsia CEO don a Montreal Canadiens jersey, after the prime minister presented Fernandes with a model of the plane emblazoned with his signature red and white, with “airasia.com” written on the side.
Dangers still exist in the government. Quebec, which now owns 25 per cent of Airbus Canada, has written off its initial US$1-billion investment in the C Series as worthless. In October, it halved the estimated amount of its next capital injection to US$300 million.
Given that difficulty, Western University professor Geraint Harvey said the announcement comes as “good news” for Quebec governments and workers.
“One hundred and fifty flights is a big deal. And it’s an interesting move given the situation in the Middle East and the current volatility in fuel prices and the impact on commercial aviation assets,” Harvey said, noting that more airlines are reducing flight schedules rather than increasing them.
AirAsia’s CEO seems to be waiting for the point.
“People will be wondering why we are buying so many planes during this recent crisis, but the crisis is an opportunity to make bold decisions and get out there and be aggressive. And wars will not last forever,” he said, referring to the US-Israeli attack on Iran that resulted in the successful blockade of the Strait of Hormuz and the increase in aviation fuel prices.
The list price of the A220-300 is US$91.5 million. The parties did not specify the markup of the purchase price, although it would not be unusual for Airbus to pay below list price for such a large order.
“Mr. Fernandes at AirAsia must have gotten a bargain; nowhere near the manufacturer’s suggested retail price,” Gradek speculated.
The A220-300 carries between 100 and 160 passengers on flights of up to 6,700 kilometers, or about seven hours.
Another 501 A220s were delivered to about 25 operators worldwide as of March 30, Airbus said.
© 2026 The Canadian Press
