AirAsia places record plane order to meet growing demand

Rob Schmitz Jul 7, 2011
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AirAsia places record plane order to meet growing demand

Rob Schmitz Jul 7, 2011
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STEVE CHIOTAKIS: Reports today say low-cost carrier AirAsia could soon buy 300 commercial aircraft from Airbus. It would be the biggest airline order ever. And yet another sign the aviation industry is focusing on Asia.

Marketplace’s Rob Schmitz is in Shanghai.


ROB SCHMITZ: Ordering 300 planes, each seating 150 passengers, at a time of high oil prices and an uncertain global economy might seem a little crazy. Not if you look at what’s happening in Asia, says analyst Kunal Sinha.

KUNAL SINHA: It has become the biggest market. Everyone’s betting on this market. So you really need that fleet to capitalize on the growth that is going to happen.

Asia’s sudden boom of discount airlines reminds Sinha of the rise of Southwest, JetBlue, and the European low-cost carrier RyanAir more than a decade ago. Except what’s happening in Asia, Sinha says, is going to be bigger. One reason, as it stands now Southeast Asian carriers need to ask for approval to start a new route. That policy’s coming to an end in 2015.

The other reason? Oh, just the 214 million new air passengers expected from China’s growing middle class over the next three years — people who, up to now, weren’t able to afford a plane ticket.

In Shanghai, I’m Rob Schmitz, for Marketplace.

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