SINGAPORE 2016: Boeing cool on orders for low-fare, long-haul in SE Asia

Orders from low-fare airlines (LFAs) operating a 4-8 hour radius with twin-aisle aircraft from their bases in Southeast Asia are likely to be limited over the next 20 years, according to Dinesh Keskar, senior vice-president–sales, Asia-Pacific & India, Boeing Commercial Airplanes.

During a briefing focussing on Boeing’s Current Market Outlook for the region, Keskar estimated that out of 760 forecast twin-aisle aircraft deliveries (510 small widebody and 260 medium widebody) between 2015 and 2034, he only expects around 10% of those to go to LFAs operating the aforementioned longer sectors. Current examples of airlines offering such flights include such as Scoot, NokScoot, Cebu Pacific and Jetstar.

Boeing forecasts a total requirement of 3,750 new aircraft for SE Asia over the 2015-34 period, with the total for the other categories being 90 regional jets, 2,860 single-aisle models and 40 large widebodies.


The forecast for the region is built on economic growth since 2010 in SE Asia of 4.5% with passenger numbers rising by 7.9% producing $29 billion in profits for the carriers. This performance outstrips the global economic growth rate since 2010 of around 2.7%, with growth in passenger numbers going up by only 6%.

While Keskar noted that the airline market in the region has become much more diverse, he emphasised that much of the growth has been driven by the LFAs.

Casting his eye over the whole Asia-Pacific region, the SVP pointed out that, after China and South Asia (Indian subcontinent), Southeast Asia is the most important sub-region. Within SE Asia, he expects Myanmar to “be the next Thailand in the next five years”, such is the activity there.

The South Asian market, Keskar noted, has been “having ups and downs for over 20 years, but right now it’s good”. He indicated three factors for the success of a market – oil price (“good right now in India”), exchange rate with the US dollar (“not good at present”) and capacity (“getting a reasonable match between demand and supply”). Two of Boeing’s major customers there, Jet Airways and SpiceJet have been profitable recently, he said.

Asked whether, with the large number of orders in the region, Boeing had any problem with requests for delayed deliveries, Keskar confirmed that the OEM is “not seeing any issue of deferrals”. In fact, he added, “analysts say that Boeing’s share of [the large orderbooks] looks fairly stable.”

Bernie Baldwin, editor, Low-Fare & Regional Airlines/

You may be interested in...

« Back to News