Lion Air firms up Boeing’s largest order ever; launch customer for 737 MAX 9

Computer-generated drawing of a 737 MAX 9 in Lion Air livery. Courtesy, Boeing


Indonesian carrier Lion Air (JT) has firmed up its agreement with Boeing announced in November to buy 201 Boeing 737 MAXs and 29 737-900ERs in a $22.4 billion contract that is Boeing’s largest ever. JT also acquired purchase rights for a further 150 737s.

The initial commitment was announced in Bali, Indonesia, with US President Barack Obama present.

Boeing put the list price of the JT firm order for 290 aircraft at $22.4 billion. “This deal is the largest commercial airplane order ever in Boeing's history by both dollar value and total number of airplanes,” Boeing Commercial Airplanes VP Asia-Pacific and India Dinesh Keskar said at Tuesday’s contract signing at the Singapore Airshow.

The contract for the CFM International LEAP-1B engine order that will power the 201 737 MAXs is valued at approximately $4.8 billion at list prices, and the CFM56-7B engine order to power the 29 73-900ERs is valued at $580 million at list prices, CFM said.

JT founder and president director Rusdi Kirana told ATW the contract offers the flexibility to decide closer to the delivery date how much of each variant JT will take. He also said financing of the new aircraft will be “no problem” and will be done partly through the US Export-Import Bank (Ex-Im Bank) and other bank loans. The company intends to outright buy up to 85%-90% of the aircraft, he said.

He said he could not detail when the purchase rights would be converted into orders, noting that “much depends if the Asian open skies materializes. If it does, as we hope for by 2015, then a very big market opens up for us.”

Deliveries of the new order will start in 2017 and continue through 2026, by then it will have taken delivery of 408 new 737-900ERs/MAXs. The new firm order adds to existing orders for 178 737-900ERs; these deliveries run through 2016. JT was the launch customer for the 737-900ER and received world's first 737-900ER in April 2007.

The Jakarta-based airline carried 27 million passengers last year and holds a domestic market share of 51, Rusdi Kirana said. He aims to increase this to 60%. The airline began operations in June 2000.

To date, the 737 MAX has orders and commitments for “more than 1,000 airplanes” from 15 customers, Boeing said.

Source: ATW