AirAsia (“AirAsia” or “the Company”) wishes to announce that it has today signed an amendment agreement (“Amendment Agreement”) with Airbus S.A.S (“Airbus”) for the revision of the delivery dates of eight (8) Airbus A320 aircraft originally scheduled for delivery in 2010 to the year 2014. 

1.         Salient terms of the Amendment Agreement 

(a)        Under a Purchase Agreement (of 11th March 2005) and a number of amendment agreements entered into between Airbus and AirAsia (collectively “the Purchase Agreement”), AirAsia has agreed to a firm order of 175 Airbus A320 aircraft which schedule of delivery runs from December 2005 to October 2014. 

(b)        Under the Amendment Agreement the parties have agreed to revise the original delivery schedule of eight (8) aircraft in 2010 (“2010 Aircraft”) to the year 2014 as follows:

(c)        With the above deferment, the original delivery of 24 aircraft in 2010 shall be reduced to 16 aircraft.  

(d).      Subject to notification not later than 31st October 2009, AirAsia also has the right to revise the delivery schedule of another eight (8) aircraft in 2011 (“2011 Aircraft”) to 2014.  If such right is exercised, the original delivery of 23 aircraft in 2011 will be reduced to another 15.

(e)        There are no penalties payable by AirAsia in revising the delivery schedule of the 2010 Aircraft or the 2011 Aircraft. 

2.         Rationale 

AirAsia foresees infrastructural constraints with the current airport facilities and until the new LCCT is constructed. The present infrastructure at the low cost terminal is not able to accommodate AirAsia’s fleet expansion in the number of aircraft originally scheduled to be delivered in 2010 and 2011 under the Purchase Agreement.   

The rationale to scale down on the delivery of aircraft in 2010 and possibly 2011 is to enable AirAsia to optimize its fleet and avoid the costs associated with leaving idle or underutilised aircraft due to infrastructural limitations – avoiding having to incur depreciation, interest expense and other costs without earning revenue.  

3.         Directors' and major shareholders' interests 

No directors and/or major shareholders of AirAsia and/or persons connected with them have any interest, whether directly or indirectly, in the Amendment Agreement. 

4.         Directors' opinion

The Board having considered all the relevant factors in respect of the Agreement is of the opinion that entering into the Amendment Agreement is in the best interest of the Company.  

5.         5.         Financial effect of the Amendment Agreement  

The Amendment Agreement is not expected to have any material impact on the financial position of AirAsia for this current financial year but will impinge on the rate of revenue growth in the ensuing years to a limited extent.  

6.         Approval required  

AirAsia does not require the approval of its shareholders or any authorities to enter into the Amendment Agreement. 

7.         Document available for inspection 

The Amendment Agreement is available for inspection at the registered office of the Company at 25-5, Block H, Jalan PJU 1/37, Dataran Prima, 47301 Petaling Jaya, Selangor Darul Ehsan, Malaysia during normal business days from Mondays to Fridays (except public holidays) for a period of 3 months from the date of this announcement.  

This announcement is dated 6th August, 2009.