17 October 2019 (closed)
USD/IDR (14,172) -15.00 -0.11%
EUR/IDR (15,700) +57.16 +0.37%
Jakarta Composite Index (6,181.01) +11.42 +0.19%
Today, Indonesian private airline Lion Mentari Airlines (Lion Air) ordered a record-breaking 234 airplanes from France-based Airbus for a combined price of €18.4 billion (US $24 billion). This mega-purchase marks the aggressive expansion drift of the Indonesian low-cost airline. In November 2011, the company had already ordered 230 aircrafts from (Airbus competitor) Boeing for the combined price of USD $21.7 billion.
Lion Air's purchase involves 109 A320neo units, 60 A320ceo units, and 65 A321neo units. The A320 series are known to be more fuel-efficient, which implies that Lion Air can continue to set competitive ticket prices in Asia's air travel sector. It also indicates that - ahead of the 2015 ASEAN Open Sky policy - Lion Air is heating up competition with Malaysia's AirAsia. The Open Sky policy implies that ASEAN member countries will be able to fly freely from and to each member country.
French President Francois Hollande witnessed the signing ceremony that involved Lion Air CEO Rusdi Kirana and Airbus President & CEO Fabrice Bregier. Hollande said that this deal marks the strong economic bond between France and Indonesia.
Lion Air is Indonesia's largest low-cost carrier and accounts for about 40 percent of domestic market share in the country's aviation industry. The company is one of the fastest growing airlines in the world. Together, the orders at Boeing and Airbus result in an impressive fleet size. However, Lion Air is currently still banned from flying to the European Union due to safety concerns.
Market Leaders in Indonesia's Aviation Industry
|• Lion Air
|• Garuda Indonesia
|• Sriwijaya Air
|• Batavia Air¹||6.0|
|• Merpati Nusantara Airlines||2.1|
in millions of passengers
¹ ceased all activities due to bankruptcy
Source: Ministry of Transportation