MALAYSIAN budget airline AirAsia plans to exercise 25 out of its 50 options to buy Airbus A320s in anticipation more regional routes will be opened to competition in 2009, its chief executive said.

AirAsia also intends to raise its number of options for the single-aisle A320, made by European planemaker Airbus , back to 50 by acquiring another 25 options, its CEO Tony Fernandes said on Thursday.

Speaking on the sidelines of an aviation conference in Singapore, Mr Fernandes said he was confident the 10-member Association of South-east Nations (Asean) will meet its deadline to reach an open skies agreement by December 2008.

'Asean has seen the benefits of liberalisation,' Mr Fernandes told reporters. 'National airlines have realised they can't hold onto protection forever,' he added.

Citing Malaysia as an example, he said national carrier Malaysian Airline System had become profitable despite competition from AirAsia. 'When MAS was a protected airline, they lost lots of money,' he said.

Transport ministers and officials from Asean are meeting in Singapore this week to discuss several issues including an open skies agreement.

The agreement envisages liberalising air travel between Asean capitals by the end of 2008, and opening the entire region to competition by 2015.

Singapore and Malaysia will also discuss a Malaysian proposal to allow AirAsia and Singapore's Tiger Airways, partly owned by Singapore Airlines, to each operate two flights between Kuala Lumpur and the city-state from as early as December 2007.

AirAsia, Asia's largest budget carrier, introduced its low-fare, no-frills concept in December 2001, and has since embarked on an aggressive expansion.

It currently operates over 60 aircraft, and said in January it had agreed to buy 50 A320 planes worth over US$3 billion (S$4.3 billion). -- REUTERS