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Southeast Asian Airlines to Buy More and More Airplanes. Here's Why

Southeast Asian Airlines to Buy More and More Airplanes. Here's Why

Boeing Co. (BA) expects airlines in Southeast Asia to buy more planes as the region remains one of the fastest growth markets for aviation.

Southeast Asia will take delivery of 4,210 new airplanes, valued at US$650 billion over the next 20 years, Dinesh Keskar, Boeing's senior vice president of sales for Asia Pacific and India, told reporters in Singapore on Friday. The forecast is 460 planes higher than a similar industry outlook Boeing gave last year.

Southeast Asia's aviation market will continue growing at 6.2% per year, outpacing the global growth rate by 1.5 percentage points, Mr. Keskar said.

"As in previous years, the low-cost business model continues to be a main driver of traffic growth in Southeast Asia, growing to more than 50% of the total Southeast Asian market by the end of the forecast period," Boeing said.

Malaysia Airlines B787 |
Malaysia Airlines B787 |

Airport infrastructure in the region remains a challenge with cities slow to add capacity. Airlines have added planes faster than demand growth in recent years. However, Mr. Keskar said airlines will continue to take deliveries as new routes open and more people fly.

Malaysia Airlines, which announced plans to buy 16 more planes from Boeing earlier this month, is expected to place a formal order by the end of the year to follow a memorandum of understanding signed during Prime Minister Najib Razak's recent visit to the U.S., Mr. Keskar said.

Malaysia Airlines plans to buy eight Boeing 787-9 'Dreamliner' jets and an additional eight 737 Max planes, according to a company announcement earlier. The new Dreamliner jets are expected to be delivered starting end-2019, Mr. Keskar said.

Source : Dow Jones Newswire


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