AirAsia, one of the world’s best low-cost airlines, is accelerating the transition of its fleet to narrowbody jets through a historic order of 150 Airbus A220-300 aircraft as it looks to cut costs in serving key markets like the Philippines.

AirAsia reached a firm agreement with jetmaker Airbus on May 6 for an order worth approximately $19 billion, with the Malaysia-based airline also prepared to expand the commitment by 150 more aircraft to meet future demand.

Tony Fernandes, chief executive officer (CEO) of AirAsia’s parent firm Capital A Berhad, said the airline is going full throttle into narrowbody jets to “double down on efficiency.”

“We never waste a crisis at AirAsia—we make bold decisions at the right moment, not the easiest moment. This order reflects our long-term discipline and the scale of our ambitions,” he said in a statement.

AirAsia’s move to expand its fleet of single-aisle aircraft comes as the global aviation industry grapples with skyrocketing jet fuel prices, as the ongoing conflict in the Middle East disrupts oil supply.

AirAsia earlier reduced its flight network to help cushion the impact of elevated fuel prices on operating costs.

For AirAsia Philippines, the company noted that its operational cost base has exceeded initial forecasts as global fuel prices have nearly doubled to $181.22 per barrel compared to last year, based on data from the International Air Transport Association (IATA).

Earlier, AirAsia X Group CEO Bo Lingam said the company is targeting lower unit costs this year through the transition to newer and more fuel-efficient aircraft.

Fernandes said the addition of fuel-efficient A220 jets to the carrier’s fleet would help improve fuel burn and reduce trip costs, ensuring resilience against future oil shocks.

“The A220 is the perfect tool for our next phase of growth, allowing us to build the world's first true low-cost network carrier,” he said.

The narrowbody aircraft provides AirAsia with the right-sized capacity to expand flight frequencies on existing routes and meet evolving capacity needs.

Compared to larger alternatives, the A220 can reach profitability with fewer passengers, opening up potential high-growth markets and secondary hubs that were previously commercially unviable.

AirAsia said the first batch of its 150 A220-300 aircraft will be delivered starting in 2028.

From then on, the aircraft will serve destinations across Southeast Asia and other countries in the Asia-Pacific region.

AirAsia Philippines said specific aircraft assignments for the country would still depend on operational and market needs. It reported a 14 percent increase in passenger volume in the first quarter compared to the same period last year.

With the arrival of these new jets, AirAsia said it would free up larger A320s and A321s for mid-haul routes, as well as A330s for longer-haul flights.

AirAsia recently announced that Bahrain will serve as the carrier’s hub in the Middle East, connecting travelers from Southeast Asia to major cities across Europe.