Story ID: 618
CFM Seals Massive Leap Deal with AirAsia
By: Gregory Polek
Caption: The Malaysian low-fare carrier finalizes a purchase contract covering 200 Leap-1As.
Word Count: 446
AirAsia and CFM International on Tuesday finalized an agreement for the purchase of 200 Leap-1A engines to power the airline’s 100 Airbus A321neos. The airline announced the airplane order and intent to purchase the engines in July 2016. 

At the same time, AirAsia has expanded its 20-year Rate-Per-Flight-Hour (RPFH) agreement to encompass its entire fleet of 808 Leap-1A engines for a combined total value of $23.1 billion at list price. Under the terms of the agreement, CFM Services guarantees maintenance costs for the AirAsia’s engines on a dollar-per-flight-hour basis.  

“We have centered our long-term growth and expansion strategy around the larger Airbus A321neo. Choosing the right engine to power those airlines is critical to the success of that strategy,” said AirAsia Group Berhad executive chairman Datuk Kamarudin Meranun. “For us, the Leap-1A continues to be the obvious choice. We have been operating it for nearly three years and are very happy. Our passengers like its quiet operation and we like the fuel efficiency and very high asset utilization it gives us.”

AirAsia has been a CFM customer for nearly 20 years. An early Leap customer, it placed its initial order for 400 Leap-1A engines—the largest in aviation history at the time—to power A320neos in June 2011. It took delivery of its first Leap-powered A320neo in 2016 and now operates 39, in addition to 191 CFM56-5B-powered A320ceos. AirAsia ranks as the single largest Airbus A320 operator in the world. 

The AirAsia deal outranked in value only a separate contract signed by Dublin-based international aircraft leasing company Avolon covering Leap-1As to power an additional 70 Airbus A320neos. aircraft. CFM valued the Avolon deal at $2.06 billion at list price.

Avolon has been a CFM customer since the company was launched in 2010 and already has a committed fleet of more than 400 CFM-powered aircraft in its portfolio. Of that total, Avolon currently has LEAP-1A engines on order to power 40 A320neo family aircraft.

CFM also landed an order from SMBC Aviation Capital covering forty Leap-1As to power 20 additional Airbus A320s. CFM values that engine order at $588 million at list price. A long-time CFM customer, Dublin-based SMBC Aviation Capital controls a portfolio of more than 350 aircraft powered by CFM56 and LEAP engines in service or on order.

Separately, Indonesia’s PT Garuda Maintenance Facility AeroAsia (GMF AeroAsia) and CFM International on Tuesday signed a material service agreement. Together with the new contract, the parties extended the current CFM56-7B overhaul license agreement for another five years and added a new five-year license for CFM56-5B overhauls.