The Malaysia-based airline, which dominates the crowded Southeast Asian low-cost sector, wants to ride the travel boom not only in its home region of half-a-billion people, but also in the emerging China and India markets.

The order for the medium-sized A320 planes, worth some 6.4 billion dollars at catalogue price and due to start arriving next month, are expected to make AirAsia the largest budget carrier in Asia by 2011 when they are all in service.

The new aircraft are expected to lift profits by lowering operating costs and boosting passenger load and confidence, AirAsia officials and analysts said.

"The A320s will take us to new heights. These brand-new aircraft will spur more people to travel. We will have the biggest and youngest fleet in Asia," AirAsia chief executive Tony Fernandes told AFP.

"This will improve our bottom line as the A320 planes have a bigger capacity and we will be able to offer more cheap tickets," he said.

The 180-seater A320 planes will completely replace AirAsia's current fleet of 28 148-seat Boeing 737-300s, which will be deployed in its joint-venture operations in Thailand and Indonesia.

AirAsia director Timothy Ross said the new aircraft will boost confidence in the no-frills carrier among those who were wary of boarding the well-used Boeings.

"Before we had people who did not want to fly with us because we had old aircraft. Now with these brand-new A320s, we are confident it will be a crowd puller," he said.

Fernandes said 2006 promised to be an exciting year for the pioneering airline thanks to strong growth in Asia's travel industry despite the threat of terrorism, rising fuel costs and the bird flu crisis.

AirAsia reported annual profits of 29.6 million dollars in June, while budget airline Tiger Airways, a unit of the state-owned Singapore Airlines, and JetStar Asia, in which the government has a stake, reportedly remain unprofitable.

However, the results for the financial year to June were 30 percent below the target set in its October 2004 initial public offering (IPO) prospectus, due to higher fuel prices and an aircraft shortage.

The carrier is due to announce its first quarter results for financial year 2006 on Monday and analysts expect to see a healthier bottom line.

Fernandes said AirAsia was now cushioned from the impact of high oil prices by its twin policy of hedging and insurance.

"The A320 planes will also see reduction of fuel costs by about 12 percent," he said, adding that fuel represents about half of overall operating costs.

The ebullient chief executive said that by the time the new budget airline terminal at Kuala Lumpur International Airport (KLIA) starts operations in July, at least eight of the new planes will have arrived.

The new terminal is being built at a cost of 108 million ringgit (28 million dollars) and Malaysia hopes it will boost KLIA's standing as a regional transport hub to rival neighbouring Singapore.

Fernandes said the new routes will probably be in southern China and in other Southeast Asian countries including Brunei, Cambodia, Indonesia, Laos, Myannmar and Vietnam.

Other AirAsia officials said the company will fly to five more destinations in China and will also secure landing rights in India.

Am Securities aviation analyst Nigel Foo said there was a huge potential for AirAsia in China, India and Southeast Asia.

"The future is very bright for this discount carrier. When they have some 20 to 30 A320 planes, their fuel costs will come down and this will translate into gains for the company," he said.

Foo said that compared to AirAsia, which has a strong domestic market coupled with low operating costs, it would be difficult for other budget carriers, especially those in Singapore, to compete.

"The only challenge will be rising fuel costs and the host of uncertainties facing the industry," he said in reference to last year's tsunami tragedy and the September 11 attacks on the United States, which hurt the travel industry.

AirAsia was launched in December 2001 with just two aircraft and has since become a significant regional player, with its business model increasingly imitated by national carriers and a host of new low-cost entrants.

The airline covers most major cities in Southeast Asia, linking Malaysia, Thailand, Indonesia, Singapore, Macau, Vietnam, Cambodia, Xiamen in China and the Philippines.

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