AirAsia, Avolon near flying taxi deal: Singapore Airshow Update

Malaysia’s AirAsia is close to an an agreement for Vertical Aerospace Ltd. flying taxis, according to people familiar with the matter, adding to a raft of carriers moving into the potential market to offer short, battery-powered flights.

A deal between the airline’s owner and aircraft-leasing firm Avolon Holdings could be announced as soon as Wednesday at the Singapore Airshow, said the people, asking not to be named because discussions were confidential. Avolon, an investor in Vertical, has ordered 500 of the U.K. startup’s VX4 aircraft, conditioned on milestones including certification. 

Among highlights of the second day of the airshow Wednesday, Airbus SE is slated to announce a plane order at 10:30 a.m. Singapore time. 

Held every two years, the event is billed as Asia’s most influential airshow. More than 13,000 delegates are expected to attend this year, with almost 600 companies participating, including Boeing Co., Airbus and Rolls-Royce Plc. That’s down from the 930 companies and almost 30,000 delegates at the 2020 show, before the pandemic decimated global aviation.

Key Developments

• Lockheed sees overseas income growing on helicopters, fighters
• Airbus sees boom in Asia-Pacific plane demand as virus eases
• Boeing doubles down on converting jets into freighters
• Airline plans new squeeze on legroom with record number of seats
• Europe dumping Covid curbs puts its travel rebound ahead of Asia

Supply chain disruptions are starting to ease, according to Honeywell Aerospace’s Asia Pacific President Steven Lien. “Demand continues to grow, and we had some earlier issues with some of our supply base that had to restructure during Covid,” Lien said in an interview with Bloomberg Television. “With demand growing these suppliers are just catching up.”

Honeywell has experienced “some disruptions” but they haven’t been major, Lien said. “We do think this supply-demand imbalance will right itself by the middle of the year,” he added.   

The deal between AirAsia and Avolon is likely to cover more than 50 VX4 electric vertical takeoff and landing aircraft, according to people familiar with the matter, who asked not to be named because discussions are confidential. The eVTOLs, which are in development, carry four passengers and a pilot for a target range of more than 100 miles, enough for short hops across or between cities.  

Avolon Chief Executive Officer Domhnal Slattery said Monday in Singapore that demand for eVTOLs is “exceptionally high.” He signaled that Avolon plans to make a “very significant announcement” on Wednesday with a “major Southeast Asian player” that could help the leasing company sell out the 500 aircraft it ordered last year.