Azernews.Az

By Bloomberg

Boeing Co. and Airbus Group SE got an early boost at the Paris Air Show with the Indonesian flag carrier splitting commitments for $20 billion between the planemakers.

PT Garuda Indonesia committed to 60 planes from Boeing valued at $10.9 billion in list prices and 30 aircraft from Airbus valued at $9.1 billion, the manufacturers said in separate statements Monday in Paris. Discounts are customary in the industry when airlines buy in bulk.

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 U.S. combined.

“The agreement is part of Garuda Indonesia’s revitalization program,” Arif Wibowo, chief executive officer of Garuda, 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 Monday. That is an addition to the 50 737 MAX 8s Garuda ordered last October.

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 Monday.

Europe Non-Stop

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 expects to carry a total of 36 million passengers this year, up from about 30 million in 2014.

The airline plans to acquire 250 planes over 10 years, and will quadruple the fleet of low-cost unit PT Citilink Indonesia to 120 planes by 2022, Wibowo said in a March 3 interview.

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, Middle East and North Asia.