AirAsia Bhd, Southeast Asia's biggest discount airline, is in talks to buy about 175 of Airbus SAS's upgraded A320 jet as it adds short-haul flights within the region, Chief Executive Officer Tony Fernandes said.

'We like the product and we'd like to order lots more because there's plenty of growth in our region,' Fernandes said in an interview today in Paris. 'We haven't agreed financial terms yet.'

The tentative order rewards Airbus, a unit of European Aeronautic Defence and Space Co, for its decision to offer a modified version of the A320 single-aisle jet with more efficient engines. The A320neo will be introduced in 2016, after postponing development of an all-new replacement model until as late as 2025, the aircraft maker said Dec. 1

Airbus expects to take 'several hundred' orders for the upgraded A320 before June's Paris Air Show, Chief Operating Officer John Leahy said Jan. 28.

Kuala Lumpur-based AirAsia has taken delivery of most of the 175 A320s it bought on a previous contract, and its order for the revamped version will be 'not dissimilar' in size, Fernandes said today.

Shifting Planes

After building up a network of 139 routes among its 75 destinations, the Malaysian low-cost carrier is pulling planes off routes longer than 3 1/2 hours to take advantage of fast- growing demand for short-haul travel.

'If you take a plane to Hyderabad, it's four hours there, four hours back and you lose that plane for the whole day,' Fernandes said. 'If I take that route out I can do another three flights to Singapore and the return is much better.'

The CEO spoke before a news conference marking yesterday's opening of services between Kuala Lumpur and Paris, the second European destination for long-haul unit AirAsia X after London.

The carrier plans to add three or four more European destinations, starting with Berlin or Cologne in the second half of this year, with Milan, Nice, Prague and Budapest under consideration for later, Fernandes said. AirAsia is in talks to buy more Airbus A330 jets to operate those routes, he added. -- Bloomberg