Airbus seeks to make inroads in Indonesian market

Anissa S. Febrina, The Jakarta Post, Jakarta

Having acquired a 53 percent share of global aircraft market, European aircraft manufacturer Airbus acknowledges that it has a lot of work to do in Indonesia over the next five years.

Despite the claimed cost-efficient features of Airbus planes, Indonesian airlines still predominantly opt for U.S manufactured Boeing aircraft for their domestic and international flights.

According to Airbus figures, only six Airbus A330-300s are operated here by national flag-carrier Garuda Indonesia. By comparison, its U.S. rival Boeing has 198 of its 737-200 models serving domestic routes in the country.

"The Indonesian airline business, especially the low cost carriers, has seen significant growth and will still grow," Airbus regional communications representative Anthony Phillips said at a media gathering on Tuesday.

He added that Airbus plans to increase its domestic market share to almost 50 percent from the current figure of less than 10 percent.

"With the fact that budget airlines here use a lot of the older generation of aircraft, we hope to deliver more of our products, highlighting their cost efficiency," said Phillips.

He explained that at the moment there were 750 Airbus passenger aircraft of various types being operated by 54 airlines in Asia Pacific -- around 37 of which were low cost carriers.

The increasing number of air accidents recently has prompted the Ministry of Transportation to restrict the age of jet aircraft, including Boeing 737-200s, which are mostly over 25 years old. The regulation will become effective on Dec. 7.

Phillips pointed to the new regulation as an opportunity for the France-based company to enter the market.

"We offer the A320 model to low cost carriers," he said. An A320 model has a capacity of between 100 and 220 passengers, while its direct competitor, the Boeing 737-200, can carry up to 219 passengers.

By comparison, the monthly leasing fee for a newer generation Boeing 737-200 ranges between US$200,000 and $250,000. However, most airlines in the country opt for the older generation of the plane, which costs around $80,000. This, however, involves higher fuel and maintenance costs.

Airline observer Dudi Sudibyo said the use of newer Airbus aircraft would save the companies between 20 percent and 25 percent on fuel expenses, depending on the category of the engine.

Meanwhile, an Airbus A320 is leased at $300,000 for a new one and $200,000 for a used aircraft. "We are looking forward to several deals on the model with Indonesian airlines," Phillips said, without going into detail.

Private budget airline AdamAir has expressed interest in purchasing the aircraft in line with the expansion of both its local and regional routes. "We are considering purchasing new aircraft, both from Boeing and Airbus. The deal should be clinched by the end of the year," said AdamAir representative Ronald Wangsanegara. He did not elaborate.

Phillips said a new A320 aircraft cost between $55 million and $65 million.

Aside from the A320, the company has also introduced its most recent long distance model, the A350, which has a 25 percent more efficient fuel burn as compared to its rival, the Boeing 787. The model will be ready for delivery in 2010.