Indonesia's Garuda makes US$5b plane order: Boeing

Indonesian flag carrier Garuda has placed an order for 50 planes worth almost US$5 billion, US plane giant Boeing said, as competition heats up for passengers in Asia's increasingly crowded skies.

Garuda ordered 46 of Boeing's new 737 MAX 8 jets and is converting existing orders for four 737-800s to 737 MAX 8s, the plane manufacturer said. The purchase is worth US$4.9 billion at current list prices, although airlines typically receive large discounts for big orders. "This order helps continue our commitment to offer the people of Indonesia and Southeast Asia the most comfortable, most efficient air travel in the region," said Emirsyah Satar, Garuda chief executive officer.

The aviation sector in Indonesia, the world's fourth most populous country with 250 million people, has grown rapidly in recent years as an economic boom creates a new class of consumers. Garuda, a state-owned, full-service airline, is facing stiff competition from budget carriers in the region, such as fellow Indonesian outfit Lion Air - which has expanded rapidly - and Malaysia's Air Asia.

The announcement marks the latest phase in an impressive turnaround for the airline. In the 1990s and early 2000s the airline was plagued by problems, including heavy debts and a poor safety record, but Satar has successfully turned it around since his appointment in 2005. It was the first Indonesian firm to be allowed back into European Union airspace in 2009 after a ban was imposed across the country's airline industry.

The 737 MAX family of aircraft are single-aisle jets that carry around 200 passengers. Boeing says they are the most fuel-efficient 737s to date, a key selling point as airlines struggle with high fuel prices. Garuda currently operates 77 Boeing 737s, Boeing said in a statement announcing the purchases on Sunday. It did not say when Garuda would start to take delivery.

SOURCE

Air Berlin cancels Boeing aircraft orders valued at US$5b

Air Berlin, Germany's second-biggest airline, said on Friday (Sep 26) it had cancelled orders with Boeing for 33 aircraft with a list price of about US$5 billion (S$6.4 billion).

The airline, which last month reported a return to profit in the second quarter, said in a statement that the cancellation would "significantly reduce the future capital expenditure" of the company. It said that under the cancellation agreement with Boeing, it would not have to pay compensation to the US company.

The two firms agreed that the "orders relating to the 18 B737 and 15 B787 aircraft not yet delivered shall be cancelled", it said. "The cancellation agreement does not provide for any obligation of the Air Berlin group to make any compensation payments to Boeing", it added.

The German group will "adapt" its existing fleet by the "acquisition or leasing of suitable aircraft", although a lower number of aircraft than first planned, it said.

Boeing, confirming the cancellation in a separate statement, said its customers "operate in a dynamic environment and their overall fleet needs evolve and change".

"It is our objective to support their needs and to adapt as necessary," it said. "Air Berlin is a long standing and valued Boeing customer and operator of a large fleet of Boeing Next-Generation 737 airplanes."

Air Berlin is due to unveil full details of a restructuring programme this month.

SOURCE

Ryanair orders 100 Boeing 737 planes for US$11b

Irish budget airline Ryanair agreed to buy 100 aircraft from Boeing for US$11 billion, with an option to purchase another 100 planes from the aerospace giant, the companies announced on Monday (Sep 8).

The order covers the 737 Boeing MAX 200, which Boeing touts as a fuel-efficient vehicle for the important single-aisle civilian market. The planes will accommodate up to 200 seats, up from the 160 in other single-aisle planes.

Ryanair said the giant order will enable it to meet its growth targets, which calls for it to expand from 82 million customers in 2014 to more than 150 million in 2024, which marks the end of the delivery stream of the planes under Monday's order.

"It's going to change the game for low-fare air travel," Ryanair chief executive Michael O'Leary said at a news conference. "It's also going to change the game in Europe."

O'Leary said Ryanair plans to use the jets to enter new markets in Europe and challenge incumbent carriers. "I hope it will hasten a new era of price wars in Europe over the next 10 years," he said.

SOURCE

Boeing announces orders for 23 planes

Boeing on Thursday (Sep 4) announced contracts for the sale of 23 aircraft, increasing its lead over Airbus in total orders for 2014.

All of the latest orders were for the Boeing 737, a smaller civilian plane that Boeing has touted for its fuel efficiency.

The US aerospace giant reached a deal to sell two planes to Panamanian company Copa Airlines. The identities of customers for the other planes were not disclosed, according to Boeing's website.

With the latest round of contracts, Boeing has reached agreements in 2014 to sell 941 planes. Earlier on Thursday, European rival Airbus disclosed that it has garnered orders for 722 planes in 2014 so far.

Boeing sells its 737s for between US$78.3 and US$113.3 million, depending on the model. Based on those figures, the orders disclosed on Thursday are worth US$1.8-US$2.6 billion.

The 737 has been Boeing's best-selling plane in 2014, accounting for 663 of the 941 aircraft sold since the start of the year. Dow member Boeing finished 0.4 percent lower at US$125.46.

SOURCE

China's BOC orders 82 Boeing planes worth US$8.8b

Aircraft leasing firm BOC Aviation said Monday it has ordered 80 Boeing 737 planes and two B777-300ERs worth a total $8.8 billion at list prices, to meet expanding client needs as travel booms in Asia.

The Singapore-based company, owned by the Bank of China, said the bulk of the orders was for 50 B737 MAX 8 planes and 30 next-generation B737-800s. The 80 planes have a value of US$8.14 billion based on 2014 catalogue prices published on Boeing's website. The orders will allow BOC Aviation to build on its fleet for the next seven years, the company said in a statement.

The firm said it has also ordered two B777-300ER aircraft, worth a total US$660 million at catalogue prices. Both planes have already been placed with an existing customer, it added. US aircraft maker Boeing said in a separate statement that the order is the "largest in BOC Aviation's 20-year history" and is part of the leasing firm's effort "to grow its portfolio of fuel-efficient airplanes".

Robert Martin, BOC Aviation's managing director and chief executive, said the fresh B737 orders followed a similar purchase made in 2006 for 50 B737 next-generation aircraft. "This is a continuation of our commitment to be responsive to airline customers which are expanding or replacing older fleets," he said. "The 737 is known for its operational and fuel efficiency, and BOC Aviation expects healthy demand for the next generation 737 and 737 MAX in the next seven years."

As of Jun 30, BOC Aviation said its fleet of 251 delivered aircraft included 118 Boeing aircraft operated by 27 airlines. At the Farnborough airshow in July, BOC Aviation also ordered 43 Airbus single-aisle A320 passenger jets worth US$4.4 billion at list prices.

Boeing has projected a travel boom in the Asia Pacific region over the next 20 years from 2013, fuelled by a rising middle class and strong regional economic growth. "As income levels rise, Asia Pacific is set to become the largest air travel market in the world. In 2033, approximately 48 per cent of global traffic will be to, from, or within the region," Boeing said in its latest regional forecast.

SOURCE

Aeroflot defies sanctions to create new low-cost airline

Russian flag carrier Aeroflot will create a new low-cost unit after Western sanctions grounded its first effort to enter the market, the airline's chief executive said on Sunday (Aug 24).

"We will after all register a new airline," Aeroflot chief executive Vitaly Savelyev was quoted as saying by Russian news agencies. He said the company's low-cost carrier, Dobrolyot, had worked well during the six weeks it was allowed to operate.

Dobrolyot was forced to shut down because it flew to Russian-annexed Crimea and was therefore hit by EU sanctions imposed over the Kremlin's alleged support for pro-Russian rebels in Ukraine, including the cancellation of the leasing contracts for its Boeing aircraft.

"We are holding talks with leasing companies and the first steps show that they want to work with us," said Savelyev. He said possible routes were still being worked out, but that the new airline could begin operations from the end of October when the winter schedule begins.

Savelyev said flights to Crimea, which Russia annexed from Ukraine in March, would depend on demand. Services to the popular Black Sea summer resort are usually cut back during the winter months.

New fuel-efficient jets are key to the success of low-cost airlines as the high cost of fuel often makes it their biggest expense. Leasing allows new airlines the opportunity to acquire aircraft more quickly without huge up-front investments.

Dobrolyot, which operated two Boeing 737-800 aircraft when it was forced to shut down, had planned to lease another six this year to begin flying to a handful of Russian cities.

SOURCE

Snoozing China air traffic controllers force jet to delay landing

A Chinese aircraft was forced to delay its landing after two air traffic controllers nodded off, reports said on Tuesday (Aug 19), sparking a wave of online anger about airline safety.

The Boeing 737 was preparing to land at Wuhan airport in central China but had no response from the air traffic control tower for 12 minutes, reports said. Contact was eventually made and China Eastern Airlines flight MU2528 from Sanya landed safely, the Sina.com news portal said.

"Because air traffic control was asleep on duty, (the plane) called many times," civil aviation authorities said in a statement quoted by Chinese business magazine Caijing. "But there was no reply, and no contact could be made with the control tower."

A separate investigation report cited by Caijing said two controllers had fallen asleep. The incident happened on July 8 and the statement was dated July 29. There was no explanation for the delay in making it public.

"Air control work is truly exhausting, but it is unforgivable to sleep on duty," a post on Sina Weibo, China's version of Twitter, said on Tuesday. "Hundreds of people's lives depend on the actions of flight tower controllers. We entrust our lives to you," the post continued.

Another netizen added: "Such serious consequences. Should let him sleep as much as he wants in prison."

SOURCE

Hainan Airlines commits to 50 Boeing 737 MAX jets

China's Hainan Airlines is finalising a deal to buy 50 fuel-efficient 737 MAX passenger planes from US aircraft maker Boeing, the two companies announced on Wednesday.

The commitment for the single-aisle 737 MAX 8s, worth a total of more than $5.1 billion at catalogue prices, is subject to approval by the Chinese government, the companies said at the Farnborough airshow.

"The new 737 MAX will help our airline grow, become more efficient and offer five-star service for our passengers," said Hainan Group chairman Adam Tan.

Boeing said Hainan was "finalising terms and working toward a purchase agreement for 50 737 MAX 8s".

"The commitment, valued at more than $5.1 billion at current list prices, will be subject to the approval of the Chinese government," a statement added.

SOURCE

Boeing wins plane orders from US leasing groups

US aircraft maker Boeing said on Tuesday that it had won a number of orders for its passenger planes from American leasing companies potentially worth a total of about $10.0 billion.

Air Lease Corporation has ordered 26 Boeing jets in a deal valued at $3.9 billion (2.9 billion euros), the companies announced on the second day of the Farnborough airshow near London.

Air Lease is buying six long-haul 777-300ER jets and has confirmed an order for 20 single-aisle 737 MAX 8 planes.

"Additional 777-300ER and 737 MAX airplanes in our portfolio provide the economics and passenger-pleasing experiences our airline customers require," said Air Lease chief executive Steven Udvar-Hazy.

"The 777 has maintained a broad customer base and will continue to do so well into the future. The 737 MAX represents game changing efficiencies and improvements for the environment in the single-aisle market," he added.

Boeing added that US lessor CIT had ordered 10 787-9 Dreamliners, valued at $2.5 billion at current list prices.

"These aircraft will add to our growing fleet of fuel efficient aircraft that remain in high demand from our airline customers, who also seek state-of-the-art aircraft that provide increased comfort and convenience for the travelling public," said Jeff Knittel, president of CIT Transportation & International Finance.

Intrepid Aviation meanwhile ordered six 777-300ERs and has an option to buy four more in a deal totalling about $3.2 billion, Boeing said on Tuesday.

SOURCE

China's Okay Airways buys Boeing jets worth US$980m

Okay Airways, the first privately-owned Chinese carrier, has agreed to buy 10 single-aisle Boeing planes worth US$980 million at current list prices, the US planemaker said on Monday.

Boeing and Okay Airways announced an order for six 737 MAX 8s and four Next-Generation 737-800s at the Farnborough airshow near London.

Okay Airways is also converting five 737-800s from a previous order into 737-900ERs, a statement added.

"The 737 is the backbone of our fleet and has fueled our growth with its proven reliability and efficiency," the statement quoted Okay president Liu Weining as saying.

"The addition of the new 737 MAX airplanes will help us explore new regional markets while strengthening our existing domestic routes," he added.

SOURCE

Boeing to launch new 737 MAX with more seats

US aerospace giant Boeing said on Sunday it would launch an upgraded version of its 737 MAX airliner with new engines and more seats aimed at low-cost airlines.

CEO Ray Conner told journalists at the Farnborough Air Show in Britain that the plane would have around 200 seats in an economy-class configuration.

The company has not received any orders for the twin-engine, single-aisle plane yet, but "we're looking forward to competing whenever it comes up," Conner said.

The Boeing 737 MAX planes are a family of mid-range airliners with new more efficient engines that will compete with the new Airbus A320 Neo.

The new version will have 11 more seats than the current 737 MAX 8, after the addition of a door on either side of the fuselage to comply with evacuation regulations, Conner said.

The original twin-jet 737 first entered service in 1968.

Boeing meanwhile said it had nothing to fear from a new version of the wide-body Airbus A330 that the European manufacturer may announce at Farnborough this week.

SOURCE

MAS retires Boeing 737-400 from its fleet

Malaysia Airlines (MAS) retired the Boeing 737-400 passenger aircraft from its fleet Saturday night, 22 years after it entered the carrier's service in 1992.

The last 737-400 series flight touched down in Kuala Lumpur International Airport (KLIA) at 9.31pm Saturday, after taking off from the Bayan Lepas airport in Penang at 8.41pm.

It carried 85 passengers and was served by 10 cockpit and cabin crew.

Capt Wan Muzainal Wan Mahazir, 42, who piloted the aircraft, said he and his crew had fond memories of the 737-400.

"It has been a good, memorable 22-odd years that the 400 series has been servicing MAS.

"(We) still have vivid, fond memories from when we started our early days training on the 400 series, 20 years ago," he told reporters here.

He added that the 400 series would be replaced by the 737-800 series, of which there are 53 planes currently in service.

MAS chief executive Ahmad Jauhari Yahya said the 737-400 had an exemplary safety record.

"It's like the retiring of an old friend," he said, adding that MAS would be banking on the 800 series to ply the routes previously serviced by the 400 series.

Ahmad said the 800 series saves 15 per cent to 20 per cent more fuel compared to the 400 series, and could fly for five hours one-way.

Ahmad said MAS expected to see more deliveries of the 800 series this year and the next, with a total of 64 of the aircraft by year-end 2015.

MAS had eight of the 737-400 in service before they retired it.

The Boeing 737-400 entered MAS' service in May 1992, and at one point ran 54 of the aircraft, making the company the largest operator of the model outside the United States.

Commenting on the 100-day anniversary of the MH370 incident Sunday, Ahmad said the search was still underway and that efforts were ongoing, by all parties involved.

SOURCE

China Eastern to buy 80 Boeing 737s

US aerospace giant Boeing said on Friday that China Eastern Airlines has agreed to buy 80 737 aircraft, its biggest single-aisle purchase to date by a Chinese airline.

The deal, a mix of current 737s and the new 737 MAX model, is worth more than $8 billion deal at list prices, Boeing said. Airlines typically receive discounts on orders.

"We look forward to making history with China Eastern as they are poised to make the largest purchase for single-aisle airplanes by a Chinese airline," said Ihssane Mounir, vice president of Boeing's sales and marketing for Northeast Asia, said in the statement.

Boeing did not provide details on the breakdown of the plane models or delivery dates.

In May, Boeing's arch-rival, European aircraft maker Airbus, won an order from China Southern Airlines for 80 single-aisle A320s with a list value of $7.9 billion.

State-controlled China Eastern, headquartered in Shanghai, operates a fleet of more than 430 aircraft, including Boeing and Airbus jetliners.

In a filing with the Hong Kong stock exchange on Friday, China Eastern said it had agreed to buy 80 Boeing airplanes valued at $7.4 billion, citing Boeing's 2012 list prices.

The airline said it received "substantive price concessions" and as a result it was buying the aircraft significantly below the list price and at even more favourable terms than those under a 2012 deal with Boeing to buy 20 777-300ERs.

China Eastern also did not reveal the breakdown of the airplanes, saying only they were "mainly" the energy-efficient 737 MAX series.

The airline said it decided to buy the Boeing aircraft due to market demand and the company's strategy to build a route network with Shanghai as the core hub and Xi'an and Kunming as the regional hubs.

The Boeing airplanes are expected to be delivered in stages from 2016 to 2020, it said.

As part of the agreement, China Eastern said it would dispose of 20 ageing Boeing aircraft -- 15 737-300s and five 757s -- to the Chicago-based Boeing for an unspecified amount of cash.

SOURCE

Boeing lifts profit outlook as jetliner demand booms

US aerospace and defence giant Boeing raised its 2014 profit outlook on Wednesday despite a first-quarter profit slide, citing strong demand for its new jetliners.

A sharp rise in pension costs from a change in retirement plans offset Boeing's robust commercial aircraft deliveries as airlines seek to renew ageing fleets with more fuel-efficient jetliners.

Boeing posted net profit in the first quarter of $965 million, down 12.7 per cent from a year ago but nevertheless better than analysts expected.

Boeing took a $334 million charge for retirement plan changes.

Core earnings per share came in at $1.76, three cents higher than a year ago and well above the $1.56 estimate.

Boeing posted an 8.3 per cent rise in revenues to $20.47 billion, and operating cash flow soared 112 per cent to $1.1 billion.

The Chicago-based company raised its 2014 profit forecast to between $7.15 and $7.35 per share, from $7.00 to $7.20, to reflect a tax settlement.

"Our outlook for the full year remains positive on the strength of demand for our fuel-efficient new commercial airplanes, our solid position in global defence, space and security markets" and the company's focus on improving financial and operational strength, Boeing chairman and chief executive Jim McNerney said in a statement.

Though the 2015 earnings forecast missed Wall Street expectations, Boeing shares scored a solid gain. Investors received more than $3 billion during the quarter through its share repurchase program and dividends.

Boeing shares jumped 2.1 per cent to $130.24 in midday trade on the New York Stock Exchange, the best performer on the Dow Jones Industrial Average in an overall lower market.

Commercial aircraft revenues climbed 19 per cent to $12.74 billion on higher deliveries of two of its best-selling models -- the 787 Dreamliner and the 737 -- after the company boosted production rates to cope with surging demand.

Boeing heftily beat European rival Airbus in the deliveries race. The company delivered 161 jetliners in the January-March quarter, a year-over-year gain of 18 per cent; Airbus delivered 141.

The re-engined 737 made up the bulk of the deliveries at 115, while 18 of the high-tech 787 Dreamliners were sent to customers. A year ago, Boeing only delivered one 787 after the airplane was grounded worldwide following battery problems.

The company said it expects to deliver between 715 and 725 jetliners this year, after a record 648 deliveries in 2013.

Boeing Commercial Airplanes won 235 net orders during the first quarter, which ended with a backlog of more than 5,1000 airplanes valued at $374 billion.

Boeing's smaller segment -- Defence, Space and Security -- continued to reflect lower US defence spending in the wake of budget cuts. Revenues fell 5.9 per cent to $7.63 billion, amid a sharp drop in military aircraft revenue.

The company's total backlog was $440 billion, down slightly from the beginning of the year. It included net orders for the first quarter of $19 billion.

At the end of the quarter on March 31, Boeing had a cash pile of $12.2 billion, down from $15.3 billion at the beginning of the year. The decline was mostly due to the share repurchases and the pay-down of maturing debt, it said. Debt was $8.9 billion, down from $9.6 billion.

SOURCE

China's Shandong Airlines orders 50 Boeing planes worth US$4.6b

Shandong Airlines, one of China's smaller carriers, said it has agreed to buy 50 passenger planes from US manufacturer Boeing for US$4.6 billion, in another sign of the country's growing demand for air travel.

The company signed a deal on Monday to purchase 16 Boeing 737-800s and 34 Boeing 737 MAX planes, a statement said, in a drive to grow its fleet for future business expansion.

China's commercial airline industry is dominated by the "Big Three" -- flag carrier Air China, China Eastern Airlines and China Southern Airlines -- but a move towards greater competition has seen the growth of smaller players.

The order represents a win for Boeing in the giant Chinese market and a vote of confidence in its newest family of single-aisle planes, the 737 MAX, which promises greater fuel efficiency.

The manufacturer will begin deliveries of the 737 MAX to global customers beginning in 2017, according to Boeing's website.

Boeing could not be reached to confirm the order, but it typically allows the customer to make the announcement.

Shandong Airlines aims to increase its fleet to more than 140 aircraft by the end of 2020, roughly doubling its total stock of planes, China's official Xinhua news agency late Monday quoted an airline official as saying.

It already operates 67 Boeing 737 planes, Xinhua said.

The airline, based in the eastern province of Shandong, will receive the aircraft in batches between 2016 and 2020, the statement said.

Shandong Airlines, established in 1994, is controlled by the Shandong Aviation Group which is backed by several government shareholders including Air China and the Shandong Economic Development and Investment Co.

Stock investors cheered the plane order. Shandong Airlines, which is listed on China's Shenzhen stock exchange, was up 3.54 per cent by midday on Tuesday.

Fierce rivals Boeing and European consortium Airbus have locked horns in a battle for lucrative orders in China, which is seeing a rapidly expanding domestic airline sector.

While slow growth in Western economies is hitting the aviation industry, Asian countries are booming with an emerging middle class keen to take to the air.

The Asia-Pacific region will require almost 13,000 new airplanes worth US$1.9 trillion over the next 20 years, Boeing said earlier this year.

At Asia's premier air show in February, organisers announced a record high of more than US$32 billion in deals as Asian carriers ordered more aircraft to meet the explosive demand for cheap, short-range travel.

Airbus accounted for nearly half of that total at the Singapore Airshow, with almost US$15 billion worth of orders for its popular A320 single-aisle plane and flagship A380 superjumbo.

Boeing said last year that it expects China's commercial aircraft fleet to triple in size over the next two decades as the country's strong economic growth boosts air traffic.

China will need 5,580 new airplanes worth US$780 billion by 2032, it said.

In September last year it finalised an order with China's Xiamen Airlines of six Boeing 787 Dreamliners, worth about US$1.3 billion at list prices.

And in March last year it signed a deal with Air China for 31 passenger and cargo planes, a deal worth US$5.2 billion at Boeing list prices at the time.

SOURCE

Malaysia Airlines jet in emergency landing after tyre bursts

A Malaysia Airlines plane with 166 people aboard was forced to make an emergency landing in Kuala Lumpur early on Monday in another blow to its safety image after the loss of flight MH370.

Flight MH192, bound for Bangalore, India, turned back to Kuala Lumpur after it was discovered that a tyre had burst on take-off, the airline said.

"As safety is of utmost priority to Malaysia Airlines, the aircraft was required to turn back to KLIA (Kuala Lumpur International Airport)," the airline said in a statement.

The plane landed safely at 1:56 am (1756 GMT), nearly four hours after it took off, the flag carrier said.

"All 159 passengers and 7 crew members on board have disembarked from the aircraft."

The airline said tyre debris discovered on the runway had led to the decision to bring the Boeing 737-800 aircraft back.

"They have landed safely -- thank God," tweeted Transport Minister Hishammuddin Hussein, who is overseeing Malaysia's response to MH370.

The airline is still reeling from the loss and presumed crash of flight MH370, which disappeared March 8 while en route from Kuala Lumpur to Beijing.

MH370 inexplicably diverted and is now believed to have crashed into the remote Indian Ocean with 239 people aboard.

Hishammuddin had tweeted that MH192 went into a holding pattern as other reports quoted officials saying it would only be allowed to land once all of its fuel had been burned off.

MH192's passengers would be accommodated in local hotels and the flight was re-timed to take off at 3:30 pm local time on Monday, the airline said.

Malaysia Airlines had previously enjoyed a good safety record, as did the Boeing 777 aircraft used for MH370.

An Australian-led multi-nation search effort is now scouring a remote area of the Indian Ocean for wreckage from flight MH370 in a bid to confirm its fate and hopefully recover the flight data recorders to determine what happened to it.

No surface debris has been found despite a month of searching, but search crews had earlier picked up signals believed to be from the beacons of the plane's data recorders.

A US Navy submersible sonar scanning device is now being deployed to look for wreckage on the seabed at depths of around 4,500 metres (15,000 feet) or more.

Nothing has yet been found and authorities have indicated they may reassess within days how to approach the extremely challenging search -- expected to be the costliest in aviation history with estimates of more than $100 million.

Malaysia's government and the airline have come under harsh criticism from Chinese relatives of MH370 passengers -- two thirds of its 227 passengers were from China -- who have alleged a bungling response and cover-up.

SOURCE

Boeing says talks with India's Jet on 'right' track

Aviation giant Boeing said on Thursday talks appeared on track for the multi-billion-dollar sale of its 737 MAX planes to India's Jet Airways, a day after sealing a major transaction with another domestic carrier.

Sale discussions with Jet -- India's leading premium carrier -- "are probably moving in the right direction", Boeing senior vice president Dinesh Keskar said on Thursday.

Keskar declined further comment on the status of the talks with Jet, a longstanding Boeing customer in which Abu Dhabi-based Etihad Airways recently picked up a 24 per cent stake.

Discussions were also under way with state-run Air India about the sale of the single-aisle 737 MAX jets but they could take far longer to come to any conclusion, Keskar said by telephone from an airshow in the southern Indian city of Hyderabad.

"Jet and Air India are obviously candidates for the MAX," said Keskar, speaking after Boeing sealed a $4.4-billion order on Wednesday from fourth-place no-frills carrier SpiceJet for 42 of the MAX jets, a more fuel-efficient version of the widely used 737s.

Boeing's talks with Jet involve the sale of 50 MAX planes with a total list price of around $5 billion, according to local media reports, but bulk orders always command discounts.

With Air India, "right now, we are working on delivery of the Dreamliner and working out issues", Keskar said.

Air India has ordered 27 of the high-tech 787 Dreamliners from Chicago-based Boeing and so far received 13, which have been hit by a string of technical snags.

The Press Trust of India reported Air India might seek compensation for the Dreamliners because it found the planes less fuel efficient than it expected, in addition to undisclosed compensation the airline has already received for delivery delays.

All major Indian airlines, except leading budget carrier IndiGo, are haemorrhaging red ink amid price wars and a sharply slowing economy.

But the sector still is in high-growth mode thanks to vast, untapped potential and a growing middle class and will need a huge number of new planes, experts say.

According to aviation consultancy CAPA, Indian airlines are expected to order a combined 400 planes this year -- over double the number now in service with the five national carriers.

"We've just touched the tip of the aviation iceberg," said Amber Dubey, global consultancy KPMG's India aerospace head, noting "access to aviation is still a dream for nearly 99.5 per cent" of India's 1.2 billion population.

Boeing in a report earlier on Thursday projected demand for over 1,600 new airplanes in India during the next 20 years, valued at $205 billion.

"India's demographics are highly favourable to growth of air transportation" while "the share of India's large population entering the workforce is growing,"Keskar said.

Boeing projects passenger airlines in India will rely primarily on single-aisle planes such as the Next-Generation 737 and the 737 MAX to link cities.

European rival Airbus said in a separate forecast India's carriers will need 1,290 new passenger aircraft valued at $190 billion between now and 2032 to satisfy surging demand.

Indian annual passenger traffic growth rates of 8.6 per cent are well above the regional Asia-Pacific average growth rate of 6.1 per cent and the world average of 4.7 per cent, Airbus noted.

The manufacturers' reports were released to coincide with the five-day air show which winds up this weekend.

SOURCE

India's SpiceJet places US$4.4b order with Boeing

Indian budget airline SpiceJet has placed an order for 42 Boeing 737 MAX planes in a deal worth $4.4 billion, the companies announced in a joint statement on Wednesday.

Delivery of the single-aisle planes will begin from 2017 as the cash-strapped SpiceJet seeks to win new customers in the vast but fiercely competitive Indian market.

"The induction of Boeing 737 MAX will further modernise our fleet, improve customer experience, and ensure that we operate the most efficient fleet well into the future," said S L Narayanan, chief financial officer of SpiceJet's parent, Sun Group.

The two companies signed a memorandum of understanding on the deal on Wednesday at an air show in the southern Indian city of Hyderabad, according to the Press Trust of India news agency.

India's aviation market has been going through tough times in an economy that grew at a decade low of 4.5 percent last year.

But airline companies see tremendous headroom for the market as the number of people taking flights in India is still very low compared with developed markets.

Low-cost carriers, including SpiceJet, IndiGo and Go Air, already dominate with a near 65-percent market share.

Abu Dhabi-based carrier Etihad Airways recently tied up with one of India's leading airlines, Jet Airways, after the government relaxed foreign investment barriers.

In the statement, Boeing senior vice president Dinesh Keskar said the strong fuel efficiencies of the 737 MAX "supports SpiceJet's mission to become India's preferred low-cost airline".

Boeing says the 737 MAX will feature eight percent lower per-seat operating costs than "the future competition".

Keskar said development of the 737 MAX is on schedule with the first flight slated for 2016 and deliveries to customers to begin in 2017.

Boeing has said the 737 MAX has received more than 1,800 orders so far.

With the latest announcement, SpiceJet has ordered 90 aeroplanes directly from Boeing, which includes the 737-800, 737-900ER and now the 737 MAX.

To date, SpiceJet has taken delivery of 31 of the Boeing planes.

SOURCE

Indonesia's Batik Air to launch international service

An airline owned by Indonesia's Lion Group announced on Thursday it will launch international services with a flight from Jakarta to Singapore later this year.

Batik Air, which is part of the Lion Group that also owns Indonesian budget carrier Lion Air, will start the flights by November or December, said its chief executive Achmad Luthfie.

The airline, which operates as a full-service carrier with meals and drinks and offers business and economy class seating, began operations in May last year servicing domestic destinations in Indonesia.

"Our first international destination will be Singapore and we aim to have more than a daily service on the route," Luthfie said in a statement.

"We chose Singapore as our first international destination because we can see that demand continues to increase," he added.

Speaking at a news conference in Singapore, Luthfie said Batik Air plans to fly next from the Indonesian capital to Kuala Lumpur in Malaysia.

Luthfie said that eventually it is looking to fly to Southern China and Western Australia.

On the domestic front, the airline plans to more than double its network to 22 destinations including Palembang, Solo and Batam.

Luthfie said the carrier is currently filling 90 percent of seats.

Batik Air operates six Boeing 737-900ER aircrafts and is based in Jakarta's Soekarno-Hatta airport.

Six Airbus A320 aircraft and four Boeing 737-800 planes will be delivered by the end of this year, the airline said.

Indonesia, a sprawling archipelago of over 17,000 islands cutting across three time zones, relies heavily on air transport and is experiencing a sharp growth in its aviation sector, thanks to a rapidly rising middle class.

SOURCE

Thailand's Nok Air to buy 15 B737s worth US$1.45b

Thai budget carrier Nok Air on Wednesday committed to buy 15 B737s from Boeing worth $1.45 billion.

The commitment, announced at the Singapore Airshow, is for eight next-generation 737-800s and seven 737 MAX 8s, Nok Air and Boeing said.

"This commitment is a major step in our growth strategy," Nok Air chief executive Patee Sarasin said in a statement.

"The 737 is the backbone of our fleet and will continue to be in the future."

Speaking at a news conference, Patee said that his airline would order more planes in the future but would take a more cautious approach compared to other low-cost carriers.

"There's going to be more aircraft coming in," he said.

"We have a lot of competitors who love to buy 200 or 300 aircraft," he said, citing Tony Fernandes, the chief executive of Malaysian budget carrier AirAsia.

"He bought so many aircraft, and currently he doesn't know where to fly to. Our strategy will not be the same as Tony Fernandes," he added.

"We actually plan our strategy in terms of destinations we fly to first, before we order our aircraft."

SOURCE