Malaysia's low-cost airline AirAsia on Tuesday placed a blockbuster order for 100 single-aisle fuel-efficient A321neo jets worth a vast $12.5 billion in the biggest deal so far at the Farnborough airshow.

The firm purchase, worth the equivalent of 11.3 billion euros at list prices, was announced shortly after Indian budget carrier Go Air had signalled its intention to buy another 72 Airbus A320neos worth $7.7 billion.

The AirAsia deal was unveiled on the second day of the Farnborough airshow by its chief executive officer Tony Fernandes and Airbus president and CEO Fabrice Bregier.

AirAsia, the region's biggest budget carrier by fleet size, added the fuel-efficient A321neo would seat up to 240 passengers in a single class layout, while enjoying greater capacity and the lowest operating costs in the single aisle category.

"The A321neo will help us to meet ongoing strong demand as well as further reduce our cost per available seat kilometre across the group, which will translate to lower air fares for our guests," Fernandes said.

"We would like to congratulate Airbus for producing the state-of-the-art A321neo aircraft that meets our requirements for efficient operations.”

Major airlines typically demand steep discounts when ordering large amounts of aircraft.

"We are extremely pleased to receive this additional order from AirAsia," added Bregier.

"This is another strong endorsement for largest member of our single aisle family, which is now the clear market leader in the 200 plus seat category."