Airbus and Boeing see strong long-term potential for the Indonesian airliner market, with both forecasting vast demand for jets in the coming two decades.
During media briefings at the inaugural Bali air show on 19 September, the two airframers described favourable demographic trends and the importance of air connectivity in a nation formed by thousands of islands spread across a vast expanse of Southeast Asia.
Anand Stanley, president Airbus Asia-Pacific, said that Indonesia is a major priority for Airbus, noting that 250 Airbus jets are in service in the country with eight airlines, with 215 on order.
Stanley observed that Indonesia’s gross domestic product is growing by over 4% annually, which will see GDP rise to over $3 trillion by 2043.
During this period, annual trips per capita will go from 0.4 to 1.4, which means that demand for new aircraft from major airframers during will come to “at least” 1,000 units in the coming 20 years.
Stanley made a strong push for the smallest jet in the Airbus family, the A220.
“The A220 is the perfect candidate to connect all the islands in Indonesia,” says Stanley.
While the market is now dominated by larger narrowbodies such as the A320 and 737 families, he feels that the A220’s ability to operate from shorter runways will allow it to serve locations that have hitherto been served by turboprops. Moreover, the A220’s 7h endurance would allow it to operate from western points in Sumatra directly to eastern points in Papua, Indonesia’s province on the island of New Guinea.
Dave Schulte, managing director marketing at Boeing, also presented an upbeat picture of Indonesia’s potential. Based on current trends, he suggests that there is likely to be demand for 1,300-1,500 jets in the coming two decades.
Boeing sees Indonesia as the world’s third fastest growing aviation market behind two other prominent emerging markets, India and Vietnam. Despite this, Indonesia’s traffic growth is not keeping pace: for Indonesia to reach the seats per capita average of other Southeast Asian countries, the country needs 200 new narrowbodies.
Indonesia’s departing seats per capita stands at 0.44, below the Southeast Asian average of 0.65.
“Indonesia’s GDP has continued to grow, but the commercial jet fleet has remained stable,” he says. “And what we’ve seen is that the seats per capita continues to decrease in Indonesia.”
In addition to the requirement for new aircraft, Schulte also observes that Indonesia’s fleet is among the oldest in Southeast Asia. Of the 350-360 airliners in service in the country, Boeing estimates the average aircraft age at 14.4 years.
“It’s an older fleet than any other country in the region,” says Schulte. “We’re going to see a lot of airplanes that are going to come out of Indonesia, and they are going to need to be replaced.
He stresses that the 737 Max is an ideal solution for Indonesian airlines given its fuel efficiency and endurance. He also claims that the Max 8 and Max 9 boast the highest schedule reliability for narrowbodies.
For Indonesia specifically, he observes that Batik Air Malaysia uses the 737 Max 8 to operate one of the longest narrowbody markets in the world, from Kuala Lumpur to Melbourne.
Corrected: A previous version of this story gave the wrong origin of Batk’s Melbourne service.
