Saturday, November 01, 2014
Subscription Centre
Receive our free e-newsletter.
Click here for more information

Boeing signs record US$22.4 billion order with Indonesia’s Lion Air

altBoeing has signed its largest ever commercial airplane order with Indonesia's Lion Air in a deal worth US$22.4 billion for 230 aircraft.

Boeing said Lion Air, Indonesia's largest carrier by passenger volume, has ordered 201 737 MAXs and 29 next-generation 737-900 ERs. The deal is the largest commercial airplane order ever in Boeing's history by both dollar value and total number of airplanes.

Lion Air will also acquire purchase rights for an additional 150 airplanes, Boeing said.

The announcement was made in a statement at the Singapore airshow yesterday.

"The 737 MAX is the best choice for Lion Air and the best airplane to serve our passengers," said Rusdi Kirana, Lion Air Founder and President Director. "We're excited to be the first airline in Asia to fly the 737 MAX and to be the global launch customer of the 737 MAX 9."

"Lion Air has been a leader in Indonesia from the very beginning," said Dinesh Keskar, vice president of Asia-Pacific and India Sales for Boeing Commercial Airplanes. "Today more people are flying in Asia at lower fares because of the 737 and this historic 737 MAX order will help connect more people in the future."

In November, Lion Air announced the original massive order during U.S. President Barack Obama's Asia-Pacific tour. Europe's Airbus had accused the United States of applying political pressure to secure the deal. The White House has said the agreement will help to support more than 110 000 US aerospace jobs.

Financing includes some support from the US Export Import bank export credit agency, the amount of which remains to be determined, Kirana added.

Kirana is still shopping for aircraft and will be back at Asia's biggest aerospace show today to pick up two Hawker Beechcraft business jets. He is also in talks with Airbus for possible future purchases of long-haul jets and is expanding deliveries of European ATR turbo-props.

While Lion Air's recent moves have generated positive public relations, the company faces difficulties with its image. It has a reputation for delays and is banned by the European Union under a move originally applied to all Indonesian airlines over safety concerns, treatment Kirana calls unfair.

Lion Air has also taken a knock from a recent drugs scandal involving two pilots. The fallout is ongoing, with the drugs agency suggesting many pilots could have problems. Kirana denies this and says he is working closely with the agency.

"It's the price of success. If you are Michael Jackson or Lady Gaga or Rusdi, there are a lot of rumours".

Lion Air has half the domestic market but to fulfil a dream of grabbing 60 percent it desperately needs more pilots and technicians.

Kirana founded Lion Air in June 2000 with his older brother. Today, the two brothers and co-owners have been contemplating floating the company for more than US$1 billion, but postponed the offering due to choppy markets.

Company News