AirAsia Nears Landmark A220 Order as Airbus Navigates Q1 Turbulence

AirAsia is set to finalize a landmark 150-jet A220 order, boosting Airbus production stability amid Q1 delivery struggles and supply chain woes.

Airbus is on the verge of a defining moment for its A220 programme, with a potential 150-jet order from AirAsia that would transform the aircraft’s commercial trajectory. The Malaysian low-cost carrier, already one of the European planemaker’s biggest customers for the A320 family, is expected to finalise the deal in Montreal this week. AirAsia chief Tony Fernandes is slated to travel to Canada for the signing, with Canadian Prime Minister Mark Carney also set to attend the event in Mirabel.

The smaller A220 jets would complement AirAsia’s existing narrow-body fleet, opening up thinner routes that don’t justify the larger A320s. For Airbus, such an order would provide long-term production stability at the Mirabel facility, where it has been working to improve the programme’s profitability since acquiring it from Bombardier in 2018.

Yet the fanfare around the potential deal masks a difficult start to the year. The civil aerospace division delivered just 114 aircraft in the first quarter, a tally that handed rival Boeing an unusual quarterly victory with 143 deliveries. Revenue slipped seven percent year-on-year to €12.7 billion, weighed down by a weak US dollar and persistent supply chain bottlenecks.

Pratt & Whitney engine shortages have been a particular drag on production, while administrative hurdles in China—now resolved—also delayed handovers. Despite these headwinds, management is sticking to its full-year target of roughly 870 deliveries and an adjusted operating profit of €7.5 billion.

The order book remains a source of resilience, with more than 9,000 aircraft in backlog. In Africa, Airbus sees significant long-term potential: the continent is expected to require nearly 1,500 new planes over the next two decades, and a recent agreement with Nigeria aims to develop local aviation infrastructure.

Not all markets have been kind. Biman Bangladesh Airlines opted for Boeing in late April, ordering 14 jets after a US trade deal lowered tariffs on Bangladeshi textile exports. Airbus had pitched a mixed fleet as recently as early May, but geopolitical currents favoured the American rival.

On the leadership front, Airbus is shaking up its strategy function. Eric Kirstetter, recruited from consultancy Roland Berger, will take over as chief strategy officer in mid-May. His mandate includes accelerating defence growth, strengthening supply chains, and expanding A220 production to 14 aircraft per month by the end of 2026—a target that the potential AirAsia order would help underpin.

Investors have responded enthusiastically to the deal speculation. Shares surged more than seven percent on Wednesday to €46.60, reclaiming their 100-day moving average. That rally comes after a bruising period: the stock had closed at €43.40 on Tuesday, leaving it deep in negative territory for 2026, with a relative strength index of 10.9 signalling extreme oversold conditions.