Boeing Finalizes $22.4b Deal With Lion Air
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Boeing Finalizes Record $22.4b Deal With Lion Air
Indonesian carrier Lion Air and Boeing on Tuesday inked a deal that not only set a new record for the Singapore Airshow, but will go down as one of the largest contracts in commercial aviation history.
The Indonesian carrier yesterday signed for 230 single-aisle aircraft worth $22.4 billion (S$28.4 billion) at catalogue prices. The deal, inked on the first day of the Singapore Airshow 2012, was itself more than double the US$10 billion in deals sealed in the 2010 edition of the biennial trade show.
The Lion Air purchase is a big win for Boeing, which has topped a recent deal in the single-aisle jet market set by European rival Airbus in June last year, when it sealed a deal with Malaysia’s AirAsia for 200 aircraft at US$18 billion.
With its latest buy, Lion Air now has 408 planes in its order book and big plans to expand its reach domestically and internationally, said its founder and president director Rusdi Kirana.
In the last decade, the airline has grown its passenger numbers by more than 20 per cent a year, he told reporters after the signing ceremony.
Last year, Lion Air, which controls half of Indonesia’s domestic air travel market, carried a total of 27 million passengers. Today, it flies about 85,000 passengers a day and has set its sights on increasing this to 100,000 by the end of the year, Kirana said.
Lion Air’s ambitious plans signal a turnaround for the carrier, which was previously dogged by bad publicity, including that arising out of its being barred by the European Union from flying into Europe and, more recently, the arrests of several of its pilots for using illicit drugs.
Going forward, Kirana said he is also banking on further liberalization within South-east Asia to boost the airline’s international presence.
Singapore is a key market, he said.
Lion Air now operates six flights a day between Jakarta and Singapore, competing with the likes of Singapore Airlines and Indonesian national carrier Garuda.
Kirana wants more flights into Singapore but has been told no more air rights, negotiated between governments, are available.
“I have heard from my government there is going to be an increase in capacity, by as much as 50 per cent, between Singapore and Jakarta.’
The Singapore-Jakarta route is already the busiest out of Changi Airport. Any further liberalization will give travellers even more flight options and competitive fares, industry watchers said.
Indonesian Transport Ministry’s aviation head Herry Bakti, who was also at the signing event, later told The Straits Times that his country was keen to expand air ties with Singapore.
Apart from more flights between the two countries, Indonesia is also interested in what is called “fifth freedom rights” out of Singapore, he said.
What this means is that Indonesian carriers will be able to fly from Indonesia to Singapore, and from here, to other international destinations. Bakti did not name specific points, but said Indonesian carriers may be interested in flights out of Singapore to other parts of Asia, as well as India and the Middle East.
When contacted, a spokesman for the Civil Aviation Authority of Singapore (CAAS) would say only that air talks are ongoing between the two countries.
Apart from more flights between Singapore and Indonesia, Bakti and Kirana are also hopeful that plans for open skies between the 10 member countries of Asean will materialise. This will remove restrictions on carriers and allow them to operate more freely within the bloc.
Kirana said: “We really hope open skies will happen, and we hope that the countries can work together so we can fly beyond Singapore or Malaysia and make these countries our transit points.”
Giving an update on the progress of Asean’s move towards liberalization, Bakti noted some delays, but that Indonesia remained committed to the goal. By 2015, carriers of Asean countries will have full freedom to operate to its five key airports in Jakarta, Medan, Surabaya, Denpasar and Makassar.
Industry watchers said forums like the Singapore Airshow provide an important opportunity for government leaders, airlines and other stakeholders to gather to discuss key issues affecting the business.
As for the organiser of the event, Singapore Airshow 2012 is off to a strong start.
Jimmy Lau, managing director of Experia Events, said he is delighted that deals worth about $26 billion were announced on the first day.
“We hope the momentum will continue through the rest of the week,” he said.
Lion Air’s order includes 201 of Boeing’s redesigned 737, which it calls the Max, and 29 extended range 737-900s. Lion Air plans to pay for the planes over 12 years with bank financing. A Boeing spokeswoman did not immediately return an email seeking more details.
Until the deal was confirmed, Boeing’s biggest firm order was from Southwest Airlines Co. for 208 planes valued at $19 billion at list prices. Airlines commonly get discounts. Southwest will be the first customer to get the 737 Max, which is still in testing. It’s scheduled for delivery in 2017.
Securing the Lion Air order is a big win for Boeing because it was considered something of a long shot when it was first announced in November. The order will more than quadruple the current fleet at Lion Air, who has had a long history of safety concerns.
In 2004, a Lion Air MD-82 crash-landed, killing 25 people. There have also been a number of other incidents, including hard landings and overshooting runways, some causing injuries and damage to planes.
In 2007 the European Union banned all of Indonesia’s 50 airlines from landing on its runways for two years. And since September, three Lion Air pilots have been arrested after testing positive for illegal drugs. The arrests raised fresh concerns over the safety of aviation in Indonesia, where it is a main mode of travel across the nation of 17,000 islands.
Dozens of airlines have emerged in Indonesia since it deregulated its aviation industry in the 1990s, and the market is growing rapidly. Boeing thinks that demand in the Asia-Pacific region will grow more than in any other part of the world over the next two decades.
Lion Air was started by a travel agent and his brother, who pooled $850,000 to launch the carrier in 1999.
It is Indonesia’s largest private airline but is small compared to most U.S. carriers. With a fleet of 76 planes, it’s about double the size of Spirit Airlines or Allegiant Travel Co., according to Airfleets.net. But it’s just one-tenth the size of United Continental, the world’s largest airline company. Lion Air is also relatively small compared with other Asian carriers. Singapore Airlines has a fleet of about 120 planes, while Japan’s All Nippon Airways, the first customer for Boeing’s 787 Dreamliner, has a fleet of 174.
Tuesday’s order also adds to Boeing’s recent momentum in its competition against European rival Airbus. Lion already operates an all-Boeing fleet.
Middle East carrier Emirates ordered $18 billion worth of long-range Boeing 777s in November. Southwest’s order for 737s was placed in December.
Those orders followed a significant win for Airbus. In July American Airlines said it will order 200 planes from Boeing, including 100 of the Max model. But for the first time American also ordered planes from Airbus — 260 A320s, the Airbus rival to the 737. Because American and parent AMR Corp. are operating under bankruptcy protection, a judge will decide whether the airline can go ahead with that large order.
The 737 Max is Boeing’s answer to the Airbus 320neo, another plane with new engines that are designed to boost fuel efficiency. That plane is due in service by late 2015.
Boeing has been building versions of the short- and medium-range 737 since the late 1960s. It has sold about 7,000 of them, making it the company’s most popular plane ever. Workers on Boeing’s assembly line in Renton, Wash., make about one every day. The company plans to boost production by roughly one-third in 2014 to meet new orders.
STI & AP February 15, 2012
The Indonesian carrier yesterday signed for 230 single-aisle aircraft worth $22.4 billion (S$28.4 billion) at catalogue prices. The deal, inked on the first day of the Singapore Airshow 2012, was itself more than double the US$10 billion in deals sealed in the 2010 edition of the biennial trade show.
The Lion Air purchase is a big win for Boeing, which has topped a recent deal in the single-aisle jet market set by European rival Airbus in June last year, when it sealed a deal with Malaysia’s AirAsia for 200 aircraft at US$18 billion.
With its latest buy, Lion Air now has 408 planes in its order book and big plans to expand its reach domestically and internationally, said its founder and president director Rusdi Kirana.
In the last decade, the airline has grown its passenger numbers by more than 20 per cent a year, he told reporters after the signing ceremony.
Last year, Lion Air, which controls half of Indonesia’s domestic air travel market, carried a total of 27 million passengers. Today, it flies about 85,000 passengers a day and has set its sights on increasing this to 100,000 by the end of the year, Kirana said.
Lion Air’s ambitious plans signal a turnaround for the carrier, which was previously dogged by bad publicity, including that arising out of its being barred by the European Union from flying into Europe and, more recently, the arrests of several of its pilots for using illicit drugs.
Going forward, Kirana said he is also banking on further liberalization within South-east Asia to boost the airline’s international presence.
Singapore is a key market, he said.
Lion Air now operates six flights a day between Jakarta and Singapore, competing with the likes of Singapore Airlines and Indonesian national carrier Garuda.
Kirana wants more flights into Singapore but has been told no more air rights, negotiated between governments, are available.
“I have heard from my government there is going to be an increase in capacity, by as much as 50 per cent, between Singapore and Jakarta.’
The Singapore-Jakarta route is already the busiest out of Changi Airport. Any further liberalization will give travellers even more flight options and competitive fares, industry watchers said.
Indonesian Transport Ministry’s aviation head Herry Bakti, who was also at the signing event, later told The Straits Times that his country was keen to expand air ties with Singapore.
Apart from more flights between the two countries, Indonesia is also interested in what is called “fifth freedom rights” out of Singapore, he said.
What this means is that Indonesian carriers will be able to fly from Indonesia to Singapore, and from here, to other international destinations. Bakti did not name specific points, but said Indonesian carriers may be interested in flights out of Singapore to other parts of Asia, as well as India and the Middle East.
When contacted, a spokesman for the Civil Aviation Authority of Singapore (CAAS) would say only that air talks are ongoing between the two countries.
Apart from more flights between Singapore and Indonesia, Bakti and Kirana are also hopeful that plans for open skies between the 10 member countries of Asean will materialise. This will remove restrictions on carriers and allow them to operate more freely within the bloc.
Kirana said: “We really hope open skies will happen, and we hope that the countries can work together so we can fly beyond Singapore or Malaysia and make these countries our transit points.”
Giving an update on the progress of Asean’s move towards liberalization, Bakti noted some delays, but that Indonesia remained committed to the goal. By 2015, carriers of Asean countries will have full freedom to operate to its five key airports in Jakarta, Medan, Surabaya, Denpasar and Makassar.
Industry watchers said forums like the Singapore Airshow provide an important opportunity for government leaders, airlines and other stakeholders to gather to discuss key issues affecting the business.
As for the organiser of the event, Singapore Airshow 2012 is off to a strong start.
Jimmy Lau, managing director of Experia Events, said he is delighted that deals worth about $26 billion were announced on the first day.
“We hope the momentum will continue through the rest of the week,” he said.
Lion Air’s order includes 201 of Boeing’s redesigned 737, which it calls the Max, and 29 extended range 737-900s. Lion Air plans to pay for the planes over 12 years with bank financing. A Boeing spokeswoman did not immediately return an email seeking more details.
Until the deal was confirmed, Boeing’s biggest firm order was from Southwest Airlines Co. for 208 planes valued at $19 billion at list prices. Airlines commonly get discounts. Southwest will be the first customer to get the 737 Max, which is still in testing. It’s scheduled for delivery in 2017.
Securing the Lion Air order is a big win for Boeing because it was considered something of a long shot when it was first announced in November. The order will more than quadruple the current fleet at Lion Air, who has had a long history of safety concerns.
In 2004, a Lion Air MD-82 crash-landed, killing 25 people. There have also been a number of other incidents, including hard landings and overshooting runways, some causing injuries and damage to planes.
In 2007 the European Union banned all of Indonesia’s 50 airlines from landing on its runways for two years. And since September, three Lion Air pilots have been arrested after testing positive for illegal drugs. The arrests raised fresh concerns over the safety of aviation in Indonesia, where it is a main mode of travel across the nation of 17,000 islands.
Dozens of airlines have emerged in Indonesia since it deregulated its aviation industry in the 1990s, and the market is growing rapidly. Boeing thinks that demand in the Asia-Pacific region will grow more than in any other part of the world over the next two decades.
Lion Air was started by a travel agent and his brother, who pooled $850,000 to launch the carrier in 1999.
It is Indonesia’s largest private airline but is small compared to most U.S. carriers. With a fleet of 76 planes, it’s about double the size of Spirit Airlines or Allegiant Travel Co., according to Airfleets.net. But it’s just one-tenth the size of United Continental, the world’s largest airline company. Lion Air is also relatively small compared with other Asian carriers. Singapore Airlines has a fleet of about 120 planes, while Japan’s All Nippon Airways, the first customer for Boeing’s 787 Dreamliner, has a fleet of 174.
Tuesday’s order also adds to Boeing’s recent momentum in its competition against European rival Airbus. Lion already operates an all-Boeing fleet.
Middle East carrier Emirates ordered $18 billion worth of long-range Boeing 777s in November. Southwest’s order for 737s was placed in December.
Those orders followed a significant win for Airbus. In July American Airlines said it will order 200 planes from Boeing, including 100 of the Max model. But for the first time American also ordered planes from Airbus — 260 A320s, the Airbus rival to the 737. Because American and parent AMR Corp. are operating under bankruptcy protection, a judge will decide whether the airline can go ahead with that large order.
The 737 Max is Boeing’s answer to the Airbus 320neo, another plane with new engines that are designed to boost fuel efficiency. That plane is due in service by late 2015.
Boeing has been building versions of the short- and medium-range 737 since the late 1960s. It has sold about 7,000 of them, making it the company’s most popular plane ever. Workers on Boeing’s assembly line in Renton, Wash., make about one every day. The company plans to boost production by roughly one-third in 2014 to meet new orders.
STI & AP February 15, 2012
Last edited by jetjockey696; 15th Feb 2012 at 03:13.
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Let's see what happens when the old check book has to be opened.
How many pay to fly guys and gals do they have to pay for the new jets
?
Or wait... maybe Lion Air is making a killing on the crystal meth trade.
How many pay to fly guys and gals do they have to pay for the new jets
?Or wait... maybe Lion Air is making a killing on the crystal meth trade.
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Actually their aircraft are financed through US banks.
Read an article about the cheap credit that has been extended to Lion Air.
They will have no problem finding crews, but I don't see the operation improving anytime soon.
Read an article about the cheap credit that has been extended to Lion Air.
They will have no problem finding crews, but I don't see the operation improving anytime soon.
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Can someone please shed some light on MSD aviation alliance with Lion air.
Heard 27 lakhs for 737 and 23 for ATR.
Anyone heard about MSD.
CHECK THE LINK
http://www.msdaviation.com/images/bo...-fo_6_2_12.pdf
Heard 27 lakhs for 737 and 23 for ATR.
Anyone heard about MSD.
CHECK THE LINK
http://www.msdaviation.com/images/bo...-fo_6_2_12.pdf
