Airbus seeks to make inroads in Indonesian market

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.