"This is a major deal for Airbus because, generally, Indonesia has been a fortress for Boeing," said Ravi Madavaram, an aerospace analyst for Frost & Sullivan in Kuala Lumpur.
Boeing not Ruffled by Lion Air Deal
But Boeing says the Airbus deal has not ruffled its feathers as it works to deliver more than 300 jets ordered from Lion Air and its offshoot carriers.
"Lion Air has ambitious growth plans and no one airplane manufacturer can meet its needs," Boeing spokesman Ken Morton said.
While slow growth in Western economies is hitting the aviation industry, Asian countries are booming with an emerging middle class keen to take to the air.
"There are three billion people in Asia, there are 300 million people in America. America has about three times more planes right now than Asia," Tony Fernandes, founder and CEO of Malaysia-based AirAsia, Asia's biggest budget carrier, said recently in an interview with Bloomberg Television.
Indonesians are increasingly relying on air travel to link the archipelago of 17,000-odd islands, with up to 900 new planes set to be delivered to Indonesia in the next decade, according to the government.
The potential is massive -- only 6% of Indonesians have travelled by air, according to officials, in a nation of 240 million people that has consistently clocked annual economic growth above 6%.
By 2021, some 180 million passengers are expected to fly domestically in Indonesia, triple the 2011 number, according to the CAPA Centre for Aviation.
But in their rush to meet that latent demand, airlines risk buying too many new planes, CAPA chief analyst Brendan Sobie said.
"In some markets you'll see over-capacity," he said, warning that carriers will find it hard to turn a profit.
