The deal could help to determine the success of the European planemaker's efforts to stymy a draft project by rival Boeing to design a new 150-200 seat aircraft.
Under pressure from airines to provide a cushion against high fuel costs, Airbus is marketing a new version of its best-selling A320 passenger jet with new engines which it says will save 15 percent in fuel bills starting from late 2015.
Malaysia-based AirAsia has said it is considering buying at least 150 of the “A320neo” aircraft as the region's largest budget carrier expands in the face of high oil prices.
But industry sources told Reuters that the range of negotiations is higher than previously expected and could reach 200 planes, trumping a 180-plane provisional order from India's IndiGo as the industry's largest ever by number of aircraft.
“They are talking about 150 to 200 aircraft,” an industry source familiar with the negotiations said, asking not to be named. Such a deal would be worth $14 billion to $18 billion at list prices, depending on the exact model of aircraft involved, though big plane orders tend to generate significant discounts.
The record for the largest Airbus deal by value is held by Emirates airine with a $22 bilion purchase in 2007. EADS subsidiary Airbus declined to comment. A spokesperson for AirAsia said talks were continuing.
Both sides hope to announce the deal at the Paris Air Show on June 20-26 but the size of the deal and its timing remain uncertain because of the sums involved, industry sources said.
AirAsia founder Tony Fernandes has set his sights on doubling the size of the nine-year-old airline to rival Southwest Airlines' fleet of more than 500 jets.
The airline has already ordered 175 of the original design of A320, of which 86 have yet to be delivered.