KUALA LUMPUR (AFP) - Southeast Asia's largest low-cost carrier AirAsia will order 25 Airbus A320s to meet rising passenger demand, officials said that after announcing plans to launch a new budget airline in Vietnam.

""We will need another 25 A320s, we will make an announcement in the next two weeks to increase our A320 fleet,"" Chief Executive Tony Fernandes told AFP.
Officials estimate the purchase cost to be around 1.6 billion dollars based on the list price of the model. The Malaysian budget carrier currently has a fleet of 50 aircraft, but has 150 Airbus A320-200s on order, which it said was needed to handle rising passenger demand.
Tom Ballantyne, chief correspondent with Orient Aviation magazine, said the purchase was part of AirAsia's plans to have a network covering the whole Asia-Pacific region.
""The growth in the region is incredible so they are basically trying to keep up with it,"" he told AFP by telephone from Australia.
AirAsia also said that it would team up with the state-owned Vietnam Shipbuilding Industry Corporation (Vinashin) to form Vina AirAsia -- Vietnam's first budget carrier -- in a 30-million-dollar deal.
""We have signed a Memorandum of Understanding with Vinashin,"" Fernandes said.
A contract will be formally signed on September 20, Fernandes told AFP, and Vina AirAsia planned to begin flying in July 2008, with possible routes to southern China from its hub in Hanoi.
Pham Thanh Binh, chairman and chief executive officer of Vinashin, said that the company was excited to be forming a partnership with AirAsia. Vinashin's business activities include shipbuilding, finance, property development, and banking.
AirAsia's has similar partnership agreements with Thailand and Indonesia -- alliances which Fernandes said have yet to bring in profits.
AirAsia, the single largest buyer of the A320-200 in the Asia-Pacific region, will formally announce the purchase of the 25 new Airbus A320s soon.
Some of the 150 jets currently on order are due to start flying in 2009.
Ballantyne said that any new orders would be linked to the unveiling in January of AirAsia X, a long-haul arm of the budget airline which Richard Branson's Virgin Group will take a 20 percent stake in.
For Airbus, Ballantyne said the order confirmed their place as a provider of A320s for the budget airline market. AirAsia, which announced new routes from Thailand and Malaysia to Hong Kong last week, on Thursday reported a 41.5 percent rise in net profit in the fourth quarter to 185.05 million ringgit (53 million dollars). They said the profit followed a 45 percent increase in passengers