AirAsia and Airbus to Announce 150 A220 Jet Order on Wednesday

• The A220 order provides momentum after the program recently lost ground to Embraer's E2, which won the Finnair campaign and outsold the A220 last year
• Airbus aims to ramp up A220 production to 12 jets per month in 2026 (down from a previous 14-jet target) to reach break-even on the money-losing program
• AirAsia, already one of Airbus's largest customers with 350+ A320-family jets on order, is expanding with smaller aircraft to serve new destinations while managing high fuel costs from Middle East conflicts

Summary

Airbus is set to announce an order for approximately 150 A220 jets from Malaysia-based AirAsia on Wednesday, May 6, 2026, representing a significant boost for the European planemaker's smallest jetliner program.

Key Details:

• Order size: About 150 A220 aircraft (110-to-130-seat capacity)
• Customer: AirAsia, already one of Airbus's largest customers with over 350 A320-family jets on order
• Event location: Montreal area, with Canadian Prime Minister Mark Carney expected to attend
• Production sites: Mirabel, Quebec (for non-U.S. customers) and Mobile, Alabama

Market Context:

The deal provides crucial momentum for the A220 program, which Airbus acquired from Bombardier in 2018 and continues to operate at a loss. The program recently lost ground to competitor Embraer's E2, which won the Finnair contract and outsold the A220 last year.

Airbus is working to achieve break-even on the A220 by ramping production to 12 aircraft per month in 2026, down from an earlier target of 14 due to supply chain issues and airlines awaiting upgraded engines. Quebec holds a minority stake in the program.

Strategic Implications:

AirAsia's expansion into smaller aircraft supports its strategy to serve new destinations amid regional low-cost carrier growth in Asia. However, the broader aviation sector faces headwinds from elevated jet fuel prices linked to the U.S.-Israeli conflict with Iran, forcing airlines to reduce flight schedules.

Canada's aerospace sector remains relatively insulated from U.S. trade tensions, as Washington exempts aerospace imports from tariffs.