Something doesn't add up, for example:
AirAsia X will remain focused on routes within four to eight hours’ flying time and would deploy the A350s on those services just as it had aimed to do with the A330s, Fernandes said, adding that a switch wouldn’t indicate a revival of plans to serve Europe.
The A350 is a rather expensive plane for a low cost carrier - let alone 66 aircraft - and using it solely on 4 to 8 hours routes doesn't make much sense. Range cannot be an issue because even the current A330-300 does the job pretty fine.
Well they can get the "A350 Regional" with the lower certified operating weights and thrusts. Doesn't cover the price issue, but it might be a "future-proofing" move as the A350-900 would give them the flexibility to (re-)launch long-haul routes down the road that the A330-900 cannot perform (as the operating weights and thrusts can be re-certified to full performance).
He mentioned that they are looking to boost capacity. For this to make sense, the A350-1000 or B787-10 might be the aircraft to achieve the capacity increase and won't be too abused on 4 to 8 hour flights.
The issue there is that all models of the A330, A350 and 787 have Exit Limits at or below the 440 seats of their current A330-900 order. So if they want more capacity in a twin, they have to go with the 777-300ER, 777-8 or 777-9.
Could be a financing issue!
This strikes me as a reasonable reason, though the A330-900 does have over 200 orders from multiple blue-chip customers, so I would think the financing issues would not be as extreme as her little sister (which only has 8 from a single customer).
They could always convert the A330neo order to even more A320neos and accelerate their A320 fleet replacement.
Possibly, but it would have to be a very large number, and would Airbus let them?
Well it's not like Airbus can stop them as Air Asia could just cancel (and eat the penalties). Plus I would expect Airbus would prefer to work with Air Asia on selecting another product rather then play hard-ball and possibly force Air Asia into Boeing's arms for the 787....possibly later followed by the 737MAX and/or MOM.