LOW-COST Southeast Asian airlines risk jeopardising their margins by buying too many aircraft too quickly, an influential aviation banker says.

Across the region, discount carriers have placed orders over the past two years for at least $50bn worth of aircraft, taking new Boeing and Airbus jets to serve dozens of fresh routes and replace their fleets. They are betting the region’s expanding middle class will demand more and more frequent air travel for years to come.

Many of those carriers are making the wrong decisions by trying to grow market share without anticipating pressure on profit margins, says DVB Bank’s Bertrand Grabowski, who heads the German bank’s aviation and land transport finance divisions.

"I think individually for most of these airlines, the peak is over and they need to be more frugal in terms of capacity growth, otherwise they are going to kill themselves in terms of profitability," says Mr Grabowski.

A glut of new capacity will force airlines to ply some less profitable routes.

Budget carriers including Air Asia, privately-held Lion Air, Cebu Air and Tiger Airways Holdings have 700-plus new aircraft on order, he said.

"Our opinion at DVB is that those book orders are far too big," said London-based Grabowski, who leads the bank in deals such as financing several aircraft for Lion Air.

Airbus and Boeing have issued brisk demand forecasts for the next 20 years, predicting $4-trillion of aircraft deliveries, mainly in emerging markets led by Asia. Most of that money will come from banks such as DVB, or leasing companies.

AirAsia and Cebu were unable to provide any immediate comment for this report, while Lion Air and Tiger could not be reached for comment.

Lion Air has an advantage over rivals because it already controls about half of Indonesia’s domestic market, which has much further to expand, Mr Grabowski says.

Airlines and their suppliers alike have staked much on air travel in a region where passenger growth outpaces that of developed nations. The world’s two largest plane makers believe that about two-thirds of new aircraft will be sold in the Asia-Pacific region over the next two decades.

Mr Grabowski, speaking ahead of a key aircraft finance industry gathering in Dublin this week, thinks many of those new orders will prove to be too optimistic.

"I would not be shocked if from 700 for those carriers, the orders will go down to 400 or 450. There could be cancellations, there could be deferrals and this will happen, almost certainly."

An analyst at the Centre for Asia Pacific Aviation says since the deliveries for aircraft have been spread across many years, markets will be able to absorb the new capacity. "In some markets, yes, competition will be intense," says Brendan Sobie, chief analyst at the industry consultancy.

In February last year, Lion Air confirmed a provisional record order for 230 Boeing aircraft taking the carrier’s order book to more than 400 aircraft. Delivery of the aircraft will be in 2017-25.

AirAsia CE Tony Fernandes believes southeast Asia is underserved, and has previously said his firm would defend its margins. As of November, AirAsia had a total fleet of 112 A320 jets and expected 266 more aircraft to be delivered up to 2026. Last month it confirmed a $9.4bn order for 100 more Airbus jets, making it the European manufacturer’s largest airline customer by number of aircraft ordered.