Lion Air Considers Airbus Jets as It Looks to Expand Its Fleet

PT Lion Mentari Airlines said it is talking to Airbus SAS and Boeing Co. (BA) about a purchase of additional single-aisle planes beyond its order for 230 Boeing 737s last year.

“We are studying every possibility to fulfill our target for the planes from every manufacturer, including with Airbus,” PT Lion Air Commercial Director Edward Sirait said in a telephone interview. “So far we haven’t concluded which manufacturer, types and number of planes to buy. But all are possible.”

The Indonesian carrier needs more aircraft as it adds flights in a region where air travel is expected to grow more than 6.4 percent annually through 2031. Lion Air already flies to more than 36 destinations within Indonesia and overseas, and announced plans to establish a low-cost carrier in Malaysia to challenge AirAsia Bhd. (AIRA) in its home market.

Airbus spokesman Stefan Schaffrath said the Toulouse-based manufacturer doesn’t comment on talks with customers or potential customers.

The low-cost carrier, called Malindo Airways, will begin flights in May and may have about 100 planes within a decade, one of its shareholders said in September. Malindo Air will draw its fleet from planes Lion Air has ordered.

The record order for 230 additional 737s in February was worth $22.4 billion at list prices. The deal, which also included 150 options, was Boeing’s biggest in dollar value and plane numbers.

Lion Air didn’t say if it’s considering the Airbus A320neo, which will have more-efficient engines than the existing A320 and enter into service from late 2015. Airbus is still seeking customers to fill A320 delivery slots in 2015.

Airbus has generally lagged behind Boeing in Indonesia, one of the more promising markets for air traffic growth in coming decades. Lion Air itself has forecast passenger growth rates of 15 percent a year. The airline said last year that the parent company fleet may expand to 470 planes by 2025 from about 100.

Airbus is also looking to sell A380 superjumbos to flagship airline Garuda Indonesia. (GIAA) The airline said Nov. 21 it had received proposals from Airbus as well as from Boeing for its 747 Intercontinental. President Director Emirsyah Satar said the review of proposals was still at an early stage.

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Just when you thought they will not be ordering new planes for a very long time, Lion Air is now mulling on whether to try Airbus' A320neo. However when you consider Indonesia's aviation industry growth of 6.4% per year, the huge orders don't seem to be as crazy, even so when Lion Air's orders has to feed Malindo Airways too.