Boom or bust

Is the dramatic growth of Asia’s LCCs sustainable?

They’re loving it in Seattle and Toulouse. The big aircraft manufacturers Boeing and Airbus may both have had to negotiate significant problems with their latest widebody models, but when it comes to single-aisles the order books are bursting at the seams, mostly thanks to an unprecedented spending spree by Asian budget operators.

March’s record order by Indonesia’s Lion Air for 234 A320 types worth $24 billion trumped all that had come before. Along with an order with Boeing last year for 230 737s, it brought the low-cost carrier’s total bill – at list prices, which it obviously won’t be paying – for new planes to $46. 4 billion. Even with a discount for bulk purchase it will still be an awful lot of money. How Lion will finance all this is a critical question and one that is difficult to answer because Rusdi and Kusnan Kirana, the brothers who own the airline, are extremely secretive about their financials.