Airbus Soars in Southeast Asia: Geopolitical Synergy Fuels Long-Term Growth

The aviation sector in Southeast Asia is undergoing a transformation, driven by surging demand for air travel, aging fleets, and the urgent need for modernization. Amid these trends, Airbus has emerged as a key beneficiary of strategic partnerships forged through French diplomatic efforts, particularly under President Emmanuel Macron. Recent orders from Vietnam's VietJet and Malaysia's Malaysia Airlines Group (MAG) highlight a confluence of geopolitical alignment and commercial opportunity that positions Airbus as a long-term growth story. Investors would be wise to capitalize on the stock's current undervaluation, as confirmed orders and regional trends signal a multiyear tailwind for the European aerospace giant.

The VietJet Deal: A Showcase of Geopolitical Diplomacy

VietJet's $16.8 billion commitment to Airbus—the largest single airline order in Southeast Asian history—was sealed during Macron's May 2024 visit to Hanoi. The agreement includes 20 A330neos (signed in 2024) and a further 100 A321neos (signed in June 2025), with options for an additional 50 planes. This deal, valued at $9.4 billion for 150 aircraft, underscores France's role as a “third-way” partner in a region wary of U.S.-China trade tensions. While the U.S. pressures Vietnam to purchase Boeing aircraft to reduce its $100 billion trade surplus, VietJet's reliance on Airbus (now accounting for 86% of its fleet) reflects a preference for European technology and diplomatic alignment.

The A330neo's 7,200-nautical-mile range and 25% fuel efficiency improvement over older models make it ideal for VietJet's expansion into Europe and the Asia-Pacific. Meanwhile, the A321neo's 20% fuel savings and passenger-friendly design will support its domestic and regional growth. With deliveries beginning in 2030, these orders bolster Airbus's order backlog and revenue visibility.

Malaysia Airlines: A Turnaround Anchored in Airbus

Malaysia Airlines' fleet modernization hinges on its 20 A330neo order (with options for 20 more), signed in 2022. By mid-2025, four A330neos had entered service, with full delivery expected by 2028. These aircraft replace outdated A330-300s and A380 superjumbos, slashing fuel costs and enabling Malaysia Airlines to pivot to a hub-and-spoke model. The airline plans to expand its fleet to 62 narrowbodies and 52 widebodies by 2033, with the A330neo as its workhorse for long-haul routes like Melbourne.

The potential exercise of options for an additional 20 A330neos—likely finalized during Malaysian Prime Minister Anwar Ibrahim's June 2025 visit to Paris—would further solidify Airbus's dominance. This deal, facilitated by Macron's diplomatic outreach, aligns with France's broader Indo-Pacific strategy, which includes $10.25 billion in defense and energy agreements during his 2024 Southeast Asia tour.

Why Airbus is Poised for Growth in a Tense Trade Landscape

1. Geopolitical Buffer: As U.S.-China trade tensions escalate, Southeast Asian nations are seeking partners untethered to either bloc. Airbus's neutrality and France's proactive diplomacy make it an attractive choice.
2. Regional Fleet Modernization: Southeast Asia's passenger traffic is projected to grow at 7.9% annually, requiring 2,800 new aircraft by 2035 (IATA). Airbus's narrow and widebody offerings dominate this space.
3. Sustainability Leadership: The A330neo's 50% SAF compatibility and Airbus's 2030 net-zero ambition resonate with ESG-focused investors.

The Investment Case: Undervalued Stock, Strong Catalysts

Airbus trades at a 2025 P/E ratio of 13.4x—below Boeing's 16.8x—despite stronger order backlogs and margin improvement. Key catalysts include:
- Order Certainty: $26.2 billion in confirmed orders from VietJet and Malaysia Airlines alone.
- Production Scaling: Airbus aims to boost A330neo production to 40 units/year by 2026, leveraging its vertical integration.
- Trade Diversification: As Boeing faces scrutiny over safety and supply chain bottlenecks, Airbus's reliability gains market share.

Risks to Consider

• Supply Chain Delays: Airbus's A320neo production has faced bottlenecks, though A330neo assembly is more stable.
• Currency Fluctuations: The euro's strength could impact export margins.

Conclusion: Capitalize on the Southeast Asia Play

Airbus's strategic wins in Southeast Asia are not just about aircraft sales—they represent a broader shift toward European influence in a region caught between superpowers. With confirmed orders, sustainable growth drivers, and an undervalued stock, Airbus presents a compelling opportunity. Investors should consider adding the stock now, as geopolitical and commercial synergies will continue to drive long-term value.

Investment Recommendation: Buy Airbus (AIR.PA), with a 12-month target price of €220 (vs. current €175), supported by order execution and margin expansion. Hold for 3–5 years to capture the full cycle of Southeast Asia's aviation boom.