Garuda Indonesia orders $5 bn worth of planes: Boeing

JAKARTA, Indonesia – Indonesian flag carrier Garuda has placed an order for 50 planes worth almost $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 4 737-800s to 737 MAX 8s, the plane manufacturer said.

The purchase is worth $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 Sunday, October 12. It did not say when Garuda would start to take delivery. – Rappler.com