Plane makers rake in spoils from Indonesia bonanza

JAKARTA - Agence France-Presse

Garuda stewardesses greet passengers boarding a plane in Sukarno Hatta airport in Jakarta. Indonesia has become a great market for plane makers. AFP photo

Buoyed by rapid economic growth, Indonesia has become a bonanza for international plane makers who are booking some of the world’s biggest sales as Western airlines suffer a downturn.

Europe’s Airbus and U.S. manufacturer Boeing have secured billions of dollars in orders over the past year as Southeast Asia’s largest economy experiences a travel boom and looks to link its archipelago of more than 17,000 islands. Indonesian carrier Lion Air placed the single largest contract in commercial aviation history during a November visit by U.S. President Barack Obama, ordering 230 Boeing aircraft for a whopping $22.4 billion. Last week, Airbus bagged a $2.5 billion contract for 11 A330-300s to national carrier Garuda International during a visit to Indonesia by British PM David Cameron.

 “There’s a major transformation going on, not just with Garuda but with the whole aviation industry in Indonesia,” industry analyst Gerry Soejatman told AFP.

“Around 60 million, or a quarter the population, travel domestically by air annually. That number could easily double if the price is right,” he said. The deal with Airbus was part of Garuda’s plans to expand services less than two years after the EU lifted a ban on the airline from entering its airspace.
“We’re seeing two things meeting harmoniously -- first a rise in economic power spreading across the demographic. Many more people have reached an economic threshold that allows them to fly,”
Sydney-based Centre for Asia Pacific Aviation Chairman Peter Harbison told AFP. “At the same time, more airlines are coming in, and are basically flying to your doorstep at a much lower price.”

Air travel demand in Europe has started to creep up again, but Fitch Ratings said in a statement earlier this year it expected poor demand in 2012 and European airlines focusing on minimizing losses.