Airbus lands record $24 billion jet order

Why a fast-growing airline is making a big bet on Indonesia.
Written by Tyler Falk, Contributor

With one of the world's fastest growing airlines looking to tap into Indonesia's booming air traffic demand, Airbus looks to be the immediate beneficiary.

Airbus announced today that it has received its biggest order ever. Indonesia's budget airline Lion Air placed a $24 billion order for 234 A320 family aircrafts -- 174, of which, will be the newer, fuel efficient A320neo or the A321neo series.

“The fuel-efficient A320 Family will enable Lion Air to achieve the lowest possible operating costs and continue to offer the most competitive fares in the Asian region,” said Rusdi Kirana, Co-Founder and CEO of Lion Air Group. "This landmark order will ensure that the Lion Air Group will continue its expansion with one of the most modern and advanced fleets in the world."

In 2012, Lion Air soared up the list of the largest airline carriers (by capacity) in the world, cracking the top 40 for the first time and becoming the sixth largest low-cost carriers. Currently, Lion Air has a modest fleet of 92 jets (almost all Boeing), according to AFP, but has been rapidly expanding its fleet. Last year it made another massive deal with Boeing -- also, the largest deal in Boeing's history -- to add over 200 jets.

And while most of its traffic is domestic, it's expanding for good reason. Last year, Indonesia's domestic air market grew 20 percent -- from 60.2 million to 72.5 million -- making it the fifth largest domestic market in the world. Since 2008 domestic air traffic has nearly doubled. Lion Air accounts for more than 40 percent of Indonesia's domestic air market -- making it the leading domestic carrier. It's plans are even more ambitious as it has said it wants to reach 60 percent market share by 2017. With these major deals, that wouldn't surprise us.

Photo: Flickr/IMAM HARTOYO

This post was originally published on Smartplanet.com

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