Lion Air's recent aircraft orders underscore the plans that the Indonesian consortium is planning to become as the largest pan-Asian low cost carrier. This plan is a serious challenge to the bid of AirAsia Bhd to become the region's biggest budget airline.The 234 medium haul Airbus planes ordered by Lion Air is the second batch after ordering a previous 230 Boeing planes.
The competition heated up when Lion Air inaugurated its first flight to Malaysia, clearly infringing on known AirAsia territory. There are questions though as to the ability of the airline to maintain the pace of growth and even observations of overextending themselves.
The growth of budget airline services in the region is just starting, with Ryanair Holdings and Easyjet Plc in Europe and Southwest Airline Co in the United States are expanding into the market.
There are concerns, especially from bankers and other financiers as to the orders made as the risk of flooding the market would only hurt everyone in the long run.
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