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AirAsia says GE engine talks, Formula 1 not linked

PARIS (Reuters) - AirAsia Chief Executive Tony Fernandes said negotiations with General Electric for a big aircraft engine order were separate from a sponsorship deal for his Formula One team, but said relations were "good."

Team Lotus earlier on Tuesday announced a broad sponsorship deal with General Electric that will see the industrial giant's branding on its racing cars starting from July.

The move comes as Team Lotus principal Fernandes negotiates a potentially hefty Airbus aircraft order for AirAsia that has sparked fierce competition between GE and Pratt & Whitney to supply several hundred jet engines.

"That deal is in the next few weeks and we are still discussing. It has to be a separate discussion but the relationship has been very good," Fernandes told Reuters.

"They both have good products," he said of the two engine makers, adding that after-sales service would be a key factor.

However he said he expected to see increasing collaboration between Formula 1, with its emphasis on advanced composites and aerodynamics, and aviation in coming years.

Fernandes, a Malaysian entrepreneur who runs Asia's largest budget carrier, is negotiating to buy at least 150 revamped medium-haul aircraft with modern engines called the A320neo.

Asked whether the deal would be ready for the Paris air show next week, Fernandes said, "I haven't booked any flights to France just yet. The ball is in their (Airbus') court. We pushed this aircraft and applaud Airbus, and let's see what happens."

(Reporting by Tim Hepher)