AirAsia Bhd will extend a deal with Airbus for its new A320neo jets to 300 planes, a source with knowledge of the deal said, making the Malaysia-based budget airline one of the largest in the world.

The two sides had announced a deal for 200 planes at the Paris Air show last month, shattering aviation records, but the additional order takes the list price of the contract to a staggering $27 billion.

Like the previous order, the additional 100 planes would also carry CFM International engines, the source said.

The source, who spoke to Reuters on condition of anonymity, said AirAsia would receive a discount for the entire order, but did not give further details.

Deliveries of the latest batch of the A320neo planes will be at the discretion of AirAsia, the source added.

The initial order of 200 planes will be delivered from 2016, as Air-Asia seeks to reap the benefits of being based near the two fastest-growing aviation markets in the world -- India and China.

The A320neo is a version of Airbus's best-selling 150-seat passenger jet offering fuel savings with new engines from 2015 and will heap pressure on Boeing to take a decision to either rework its current offering or come up with something new.

AirAsia chief Tony Fernandes told Reuters earlier this week he saw the company as a 500-plane airline, which would make it second only to America's Southwest Airlines.

AirAsia, which flies to 63 destinations in more than 20 countries, has 90 planes currently, almost all single-aisle Airbus A320s. Besides the 300 Airbus A320neo deal, it has another 75 Airbus aircraft already in the pipeline, and which Fernandes said he was keeping on order.

(Reporting by Y-Sing Liau and Raju Gopalakrishnan, Writing by Vinu Pilakkott; Editing by Muralikumar Anantharaman)

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