Garuda Indonesia, Airbus In Draft Deal On 25 A320 Jets

Flag carrier Garuda Indonesia and European plane maker Airbus said on Tuesday they had signed a memorandum of understanding on the sale of 25 A320 medium-haul jets, including 10 upgraded A320neos.

The two companies said the jets will replece the Boeing 737 aircraft flown by Garuda's low-cost unit, Citilink, a decision which could put even more pressure on the US aerospace giant to make up its mind about the 737's future.

Boeing has said it expects to make a decision this year on the 737, the world's biggest selling aircraft, with the choice between an upgrade, as with the A320neo, or a new plane, which is higher risk and very costly.

"This aircraft will be very comptetitive because is fuel efficient," Garuda head Emirsyah Satar said of the order, adding that the Indonesian market has huge potential.

The A320neo is claimed to be 15-percent more fuel efficient than its predecessor, with high-tech new engines making the difference.

Airbus and Boeing have announced sales at the Paris Airshow of some 266 aircraft in the key medium-haul market dominated by the A320 and 737 series, with the A320neo accounting for 182.

Analysts say the success of the A320neo demands some response from Boeing but the US company insists it will take its time to make the right decision on the 737's future and that in any case its product is still the better plane.

- By Agence France-Presse

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