Thursday, 17 November 2011

Lion Air's roar for 230 Boeing 737's

Indonesia's Lion Air has agreed to buy 230 Boeing 737 aircraft with a list price of $21.7 billion, the White House said on Thursday, touting the sale as the US firm's biggest-ever commercial order.

The deal was announced soon after President Barack Obama touched down in Bali for the East Asia summit on the final leg of a regional tour partly aimed at drumming up markets for US products at a time of slow growth back home.

The White House also highlighted other deals, some already announced, including the sale of eight Boeing 777 planes to Singapore Airlines and an order for Sikorsky Black Hawk helicopters by Brunei's ministry of defence.

Officials said the Lion Air order was for 201 Boeing 737 MAX aircraft and 29 next generation 737 ER planes.

"The president will join a signing ceremony between the representatives of Boeing and Lion Air on November 18," a White House statement said.

"With 230 airplanes at a list price of $21.7 billion, this order represents the largest commercial airplane agreement ever for Boeing."

Aviation Week reported earlier this month that Lion Air, Indonesia's largest privately-held carrier, was seeking new narrow bodied aircraft and was considering 737s and the European-made Airbus 320.

There were no immediate details about the delivery schedule for the Lion Air order, but Craig West from Britain-based Airliner World magazine, said he suspected they would be delivered over many years.

"The 737 MAX, which is a next generation aircraft, is not due to fly before 2016, so deliveries presumably would start in 2017 or 2018," he said.

"This could be over a very long period of time, so that when the last batch begins to be delivered, the first batch are already so old that they are put out of service," he told AFP.

In 2007, Lion Air was among dozens of Indonesian airlines banned by the European Union for lax safety standards.

The ban on flag carrier Garuda Indonesia and several other carriers was lifted in July 2009, but Lion Air still remains on the blacklist.

The White House also said that the deal included options for a further 150 aircraft valued at $14 billion, which could put the eventual deal at $35 billion.

Officials said that the deal would support 110,000 American jobs at Boeing and at suppliers throughout 43 American states, at a time of 9.0 percent unemployment which is clouding Obama's 2012 re-election prospects.

The White House also highlighted another big Boeing deal, the sale of eight 777-300ER jets to Singapore Airlines worth $2.4 billion which will support a further 11,000 US jobs. That contract had already been made public.

Indonesia's Garuda Airlines meanwhile has signed a contract to buy 50 CFM56 General Electric engines worth $1.3 billion, the White House said.

And Sikorsky will sell Brunei 12 Blackhawk S-70i helicopters worth $325 million, the White House said, adding that the total value of all the deals was $25 billion.

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