Indonesian Carrier Orders $24 Billion in Jets From Airbus

PARIS — Airbus said Monday that it had a received an order for $24 billion worth of new single-aisle jets from the Indonesian budget airline Lion Air, marking a significant inroad for the European plane maker into one of Asia’s fastest-growing air travel markets that until now has been dominated by its American rival, Boeing.

The firm order, for 234 of the company’s popular A320- and A321-series jets, was announced by top executives of Airbus and Lion Air at a ceremony in Paris overseen by France’s president, François Hollande. The signing is part of a series of events planned by the government this week aimed at promoting France’s manufacturing industry, which is struggling amid Europe’s economic downturn.

The first of the new planes, which sell for between $92 million and $117 million each at list prices, were expected to be delivered in 2014.

The announcement in the gilt halls of France’s Elysée Palace follows an equally high-profile ceremony in Jakarta in 2011, when President Barack Obama attended the signing of a $22 billion deal between Lion Air and Boeing.

Despite only modest signs of a global economic recovery, many of the world’s established airlines are continuing to order new jets at a rapid pace as they seek to upgrade to more energy-efficient models amid stubbornly high fuel prices.

Lion Air’s latest deal follows a flurry of new orders for new jets announced last week, totaling more than $30 billion at list prices. Lufthansa, the German flag carrier, announced orders for more than 100 new single-aisle and wide-body planes from both Airbus and Boeing, while Turkish Airlines said it would purchase up to 117 Airbus single-aisle planes. Ryanair, the Irish discount carrier, is also expected to reach a deal soon for up to $15 billion worth of Boeing 737 jets.

Meanwhile, emerging markets, particularly in Southeast Asia, are experiencing a boom in air traffic demand as higher incomes give rise to a growing middle class. The Indonesian archipelago alone is expected to see air traffic double over the next five years.

The spectacular growth in Indonesian air travel, however, has some air safety experts concerned that country’s infrastructure and regulatory oversight have been unable to keep pace with the expansion. The European Union, for example, which maintains a list of what it says are unsafe airlines, bars all but one Indonesian carrier — Garuda Indonesia — from its skies.

Article source: http://www.nytimes.com/2013/03/19/business/global/indonesian-carrier-orders-24-billion-in-jets-from-airbus.html?partner=rss&emc=rss