Boeing Co and Airbus Group SE yesterday got an early boost at the Paris Air Show with the Indonesian flag carrier splitting commitments for US$20 billion between the planemakers.
PT Garuda Indonesia committed to 60 planes from Boeing valued at US$10.9 billion in list prices and 30 aircraft from Airbus valued at US$9.1 billion, the manufacturers said in separate statements yesterday in Paris.
Garuda is competing with PT Lion Mentari Airlines in a market where passenger numbers are expected to surge as a burgeoning middle class travels more.
From Indonesia to Vietnam to Myanmar, carriers in Southeast Asia are buying planes to serve a market of about 600 million people, roughly equal to the populations of Brazil, Germany and the US combined.
“The agreement is part of Garuda Indonesia’s revitalization program,” Garuda chief executive officer Arif Wibowo said in a statement distributed by Boeing in Paris.
The deal is to “support the airline’s future plan to further expand its network globally,” he said.
Garuda plans to buy 30 787-9 aircraft and as many as 30 737 MAX 8s, according to a statement by Boeing yesterday. That is an addition to the 50 737 MAX 8s that it ordered in October last year.
Garuda has no plans to add larger four-engine planes such as Boeing’s 747-8 or Airbus A380 superjumbos to support hajj flights, Wibowo said in Paris.
Boeing and Garuda will work to finalize the order, according to the statement. Deliveries of the 737 aircraft will be from 2022 to 2025 and 787s will be from 2022 to 2024.
The Indonesian carrier signed a letter of intent with Airbus to buy 30 A350 XWB, which will enable non-stop flights from Jakarta or Bali to Europe.
The number of Indonesians who will travel by air is expected to triple by 2034, making it the world’s sixth-largest market, according to the International Air Transport Association.
Garuda plans to grow the fleet size by an average of 6 percent to 7 percent a year over the next decade. Most of the orders will be for single-aisle jets to serve domestic and regional destinations that feed traffic into its long-haul flights to Europe, the Middle East and North Asia.
In other news from the Paris show, Airbus yesterday increased its 20-year forecast for jet demand by nearly 4 percent and was upbeat about prospects for superjumbos such as its troubled A380 plane, driven by growth in emerging markets in the Asia-Pacific region and China.
Airbus sees demand for 32,585 new planes worth US$4.9 trillion, up from a previous forecast in September last year for 31,358 planes worth US$4.6 trillion, it said at the show.
The European firm trimmed its forecast for global passenger growth, predicting an annual average rate of 4.6 percent over the next 20 years, compared with last year’s forecast for 4.7 percent.
The growth of the middle class in developing countries would drive traffic growth, sales chief John Leahy said at a briefing.
Additional reporting by Reuters
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