Garuda Indonesia orders 50 B737 MAX 8s

13 Oct 2014 by Clement Huang

Garuda Indonesia (Garuda) has put pen to paper on a new contract for 50 B737 MAX 8s, valued at US$4.9 billion at current list prices.

The order sees Indonesia’s flag carrier convert an existing order for four Next Generation B737-800s to B737 MAX 8s, in addition to agreeing to purchase 46 more units of the aircraft model.

“The 737 MAX 8 represents a bright, efficient future for Garuda Indonesia,” said Emirsyah Satar, the airline's chief executive. “This order helps continue our commitment to offer the people of Indonesia and Southeast Asia the most comfortable, most efficient air travel in the region.”

It has not been a rosy year for Garuda, as the airline recorded a loss of US$212 million in the first half of 2014 (see here). However, the Indonesian domestic market has emerged as one of the largest and most dynamic in the world, with a year-on-year growth of over 20 per cent.

Despite stiff competition, particularly from the likes of low-cost carriers, Garuda believes that the investment is beneficial for its domestic and regional services in the long run. With an existing fleet consisting of 75 B737-800s, the B737 MAX 8 is the logical successor due to its improved fuel efficiency, and higher load density.

Compared to the B737-800, the B737 MAX 8 will be 14 per cent more fuel efficient, and boast an 8 per cent per seat operating cost advantage over the aircraft’s direct competitor – the Airbus A320neo.

Deliveries for the B737 MAX 8 are expected to begin in 2017 and continue through to 2023.

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Clement Huang

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