AirAsia to buy 200 A320neo plus 100 options: Sources

AirAsia is set to place a record order for 200 revamped A320neo jets plus 100 options in a USD 17 billion deal making the Malaysian carrier Airbus's largest airline customer, industry sources said.

The deal is expected to be finalized at the Paris Air Show on Thursday by chief executive Tony Fernandes, who flew into France overnight to give final approval to the largest ever single order for Airbus A320 single-aisle jets.

The order is billed as the biggest ever civil aircraft order by the number of planes and the third in value for the European manufacturer behind Emirates and Qatar Airways, which is also expected to buy more Airbus planes on Thursday.

The A320neo is a version of Airbus's best-selling 150-seat passenger jet offering fuel savings with new engines from 2015.

AirAsia, already Asia's largest budget carrier, plans to take delivery of 86 ordinary A320s that it has not yet received under an earlier deal for 175 aircraft, industry sources said.

Parties involved in the aircraft talks declined comment.

The deal by Asia's largest budget carrier adds to evidence of a multi-speed recovery that has seen Asian economies plan for frenetic transport growth, especially in the low-cost sector.

It eclipses another historic 180-plane Airbus A320neo order from IndiGo, unveiled just 24 hours earlier.

The Indian carrier briefly headed the league table of Airbus airline customers and now becomes its second-largest operator.

The statistics do not include leasing giants ILFC <AIG.N> and GECAS <GE.N> of the United States, which own larger fleets but rent them out to airlines that fly the aircraft.

The AirAsia deal, once confirmed by the airline's red cap-wearing motor-racing team owner and CEO, will be the climax of a busy week for Airbus, the world's largest aircraft maker ahead of Boeing <BA.N>.

So far this week Airbus has reported firm or provisional orders for 545 A320neo aircraft. Including pre-show deals, there are signs it will reach close to 1,000 A320neo firm deals or provisional agreements by the end of the week.

Industry analysts say the rush of orders may put pressure on Boeing to make up its mind whether to re-engine its competing 737 airplane in 2016 or wait a few years longer and build an all-new model from scratch to offer even greater benefits.

Boeing has said it will make the crucial strategy decision affecting airlines and suppliers by around the end of the year and has vowed not to base its thinking on what Airbus does.