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Europe's Airbus lands record $20bn order

Deal could break rival Boeing's grip on Indonesia's Lion Air, one the world's fastest-growing carriers, sources say.
Last Modified: 18 Mar 2013 15:19
Indonesia's aviation market, serving the world's fourth largest population, is growing at 21 percent annually [EPA]

Europe's Airbus has secured a record order potentially worth $20bn at list prices from Indonesia's Lion Air, sources familiar with the matter say.

According to industry sources, the deal would break rival Boeing's grip on one of the world's fastest-growing airlines, Reuters news agency reported on Monday.

In a sign of the rising importance of Asian budget carriers for high-tech manufacturing jobs, the deal is expected to be announced on Monday at a ceremony overseen by Francois Hollande, the French president, the sources said, asking not to be named.

EADS subsidiary Airbus declined comment.

France said earlier Hollande would meet Airbus chief executive Fabrice Bregier on Monday to celebrate "a major industrial deal," but withheld further details.

The red-carpet event mirrors a record 201-plane order for equivalent Boeing aircraft from Lion Air signed in front of visiting US President Barack Obama in late 2011, sparking European claims of US political pressure which Washington and Boeing denied.

The sources said the new Airbus A320-family order from Lion Air, founded by travel entrepreneur Rusdi Kirana, could top that number.

Kirana could not immediately be reached for comment.

Fertile market

Southeast Asia has emerged as one of the most fertile markets for popular medium-haul jets built by Airbus and Boeing, as rising incomes and a growing middle class boost air traffic.

Indonesia's 17,000 islands and relatively robust economy, well insulated from Europe's financial crisis, have made the world's largest archipelago a magnet for aircraft sellers.

Its domestic aviation market, serving the world's fourth largest population, is growing at 21 percent annually.

The Reuters news agency reported last week the two leading jetmakers were scrapping over a potentially rapid new order from Lion Air.

French newspaper Les Echos reported in its early Monday edition that the order, for over 200 Airbus jets, would include many of the newest fuel-saving type of A320, worth $100m each.

While below a recent peak, airplane demand remains robust as airlines and lessors modernise fleets to drive down fuel costs, while emerging market growth continues almost unchecked.

However, there have been suggestions growth is cooling, prompting some carriers to buy aircraft only to lease them out.

In deals totalling $35bn, Germany's Lufthansa last week ordered 102 Airbus and Boeing jets, Turkish Airlines picked up 82 from Airbus and Ireland's Ryanair is expected to sign for 170 Boeings.

The values represent official prices but in practice, strategic airlines win significant discounts for big orders.

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