* Expects growth in 2009, adding 10 to 15 routes
* Sees a gap in the market for budget airlines
* Says Man Utd sponsorship would not make economic sense

By Harpreet Bhal

LONDON (Reuters) - Malaysian airline AirAsia expects to expand its service and remain resilient this year, as it sees good demand for budget air travel despite the global recession putting a strain on the airline industry.

The airline, along with long-haul associate Air Asia X, will add 10 to 15 new routes this year, including flights from Kuala Lumpur to Sydney, New Delhi and Taipei, and plans to increase the frequency of its newly launched London Stansted flight to a daily service from July this year.

However the company said plans to sponsor Manchester United shirts would not make economic sense for the airline at the moment, but discussions are still underway between the two parties.

AirAsia's rapid expansion, which includes deliveries of 175 Airbus A320-200 and 25 larger capacity A330 aircraft by 2014, comes at a time when the airline industry is grappling with falling demand in the face of a prolonged global recession.

'We're one of the few airlines that are actually looking at still growing. When everyone cuts back there is a gap for operators like us to capitalise on,' Fernandes told Reuters in an interview.

'In the immediate term business looks good. We're in the sweeter spot of business. I'd rather be a low cost airline in a recession than a premium airline because I think people look for value. People still want to travel,' he said.

His comments came amid a day of further woe for European airlines, as Germany's Lufthansa warned 2009 would be a bleak year after its net profit slumped 64 percent in FY08.

(Reporting by Harpreet Bhal, Editing by John Bowker and Elaine Hardcastle)