AirAsia thinks about the Airbus double order but how much will it pay?

FARNBOROUGH, England (Reuters) – AirAsia ( AIRA.KL ) discusses the eventual purchase of 100 other Airbus A321neo aircraft while the company's CEO, the company's Airbus A320, and the Airbus Airbus company, said it would be the first time. Malaysian entrepreneur Tony Fernandes, and Airbus lead in parallel negotiations for an expanded order for large A330neo aircraft, industry sources said.

Fernandes could attend this week's Farnborough Airshow where both parties will attempt to put an end to their relationships and to accept all or part of a complex set of widebody aircraft and narrow-body aircraft, said two sources.

However, it is unclear exactly how much fresh money the operation, if it is completed, would put in the coffers of Airbus as the low cost carrier juggles existing orders and leads a negotiation difficult on the prices and the size of the deposits, one of the sources said.

Another says that any agreement could involve a significant number of conversions or "unsubscribe" between existing orders. AirAsia has ordered 600 aircraft, two thirds of which remain to be delivered.

Airbus declined to comment. AirAsia could not be reached.

Two sources said that AirAsia could place an order for 100 A321neo single-aisle aircraft worth $ 13 billion at list price, according to Bloomberg News.

A third source suggested that it might involve an upgrade of smaller models, which could trigger other orders. None of the sources, who are aware of the case, have agreed to be cited for confidential interviews.

The range of options highlights the complexity of AirAsia's portfolio as it expands. But despite the attractiveness of an order of 100 aircraft, all eyes are turned to AirAsia to confirm the A330neo, as there is no problem selling the smaller aisles .

AirAsia, Asia's largest economy carrier, has been sending conflicting signals for months to know it will confirm its previous deal for 66 improved A330neo – seen by far by Boeing Co ( BA.N ), who hopes to replace the order with his 787 Dreamliner.

Delegates say that Airbus needs a marketing boost for its A330neo and that it would like to bring Fernandes to the widely publicized Farnborough Air Show to reconfirm and expand its order.

Indeed, losing the biggest buyer of the A330neo could push bankers to tighten the conditions of funding the same plane for other airlines, and thus further damage sales.

However, sources said that relations between the companies had cooled following recent Airbus management changes.

An AirAsia order would signal that the links between Airbus and its largest Asian customer have improved, although Airbus has reported an order to protect profit margins.

The financiers speculate that AirAsia will push for discounts of up to 60% for the AeroNe and two thirds for the A330neo. The standard industry rebates are closer to 50%.

According to the negotiations, the amount of money remitted on the first day alongside any new AirAsia order could be low.

"This agreement has no value in terms of financial commitment (initial)," said the first source to Reuters.