ATR announced an order from Lion Air for another 40 ATR72-600s for $1bn at list prices. The airline already has 40 ATRs. Deploying turboprops in Indonesia is logical, given the sheer size of the country. Take a look at the map.
Indonesia is made up of 17,508 islands and about 6,000 are inhabited. The CIA Fact Book says the country has 186 airports with paved runways and another 487 with unpaved runways. The most effective way to travel, with any speed, in Indonesia is by air. Connecting the myriad small communities is clearly best accomplished by deploying lots of turboprops.
But the logic of the ATR order needs to be considered in light of another data point. Lion Air has 155 aircraft in service – but it has over 500 on order; 505 to be specific. The current airline fleet in all of Indonesia is 598. Here is a table with the main airlines and their fleet sizes. There are 45 airlines in Indonesia.
As the table shows, Lion accounts for 26% of the Indonesia fleet. For an airline with 155 aircraft, to have an order book over 500 is ambitious. Probably too ambitious.
Lion Air will end up leasing out most of those planes…
That may be their idea, but I’m skeptical if competing airlines will be playing along.
If I were an airline boss, why should I pamper the bottom line of a rival airline by leasing planes from them?
They are clearly trying to get an advantage with this strategy.