This reaffirms the carrier’s position as the largest airline customer for the Airbus single aisle category.

The contract marks the first order placed by the low cost carrier for the largest model in the best-selling A320 Family.

To date, over 170 A320s have already been delivered to the airline and are flying with its units in Malaysia,  India, Indonesia, Japan and the Philippines.

AirAsia group CEO Tan Sri Tony Fernandes said the A321neo will be operated on the airlines most populous routes and at airports with infrastructure constraints.

Apart from this it will also allow the airline to bring higher passenger volumes with same slots, which will provide benefits to the airports like more efficient operations, higher revenues from passenger service charges and more airport retail purchases, he said.

He said the airlines currently operates close to 1,000 flights per day to more than 120 destinations in 24 countries.

The group recorded a robust load factor of 85% in the first quarter of 2016, up 8 percentage points from the same period last year, Fernandes said, adding that he is confident of maintaining his momentum going forward.

The A321neo will help to meet ongoing strong demand as well as reduce the airlines cost per available seat kilometer across the group which will translate to lower airfares for guests, he noted.

The A320 Family is the world’s best-selling single aisle product line with nearly 12,600 orders since launch and more than 7,100  aircraft delivered to some 320 operators worldwide.