Lion Air : JT : LNI :

Indonesia's Lion Air considering Airbus, Boeing craft

SINGAPORE, Feb 11 (Reuters) - Indonesia's low cost carrier Lion Air is in negotiations to buy 10 long haul aircraft from Airbus or Boeing Co, its founder and Chief Executive Rusdi Kirana said on Saturday.

Kirana said the aircraft would be either Airbus A330 or Boeing 787 Dreamliner passenger jets.

Indonesia’s Lion Air Considering Airbus Narrowbody Order

Indonesia’s Lion Air, the world’s largest customer for Boeing 737-900ERs, may be about to place an order for Airbus aircraft.

Sources close to the airline tell Aviation Week that President Director Rusdi Kirana is considering Airbus's new engine option for its A320 family of narrowbodies. It is unclear, however, which NEO variant he would order, or how many. Lion Air officials were unavailable for comment.

If Rusdi decides to purchase Airbus narrowbodies, it will be a major coup for the European manufacturer, although vindication for a sales campaign to win over Lion, one of Boeing’s largest customers. According to Boeing's website, Lion's backlog consists of 201 Boeing 737 MAX aircraft, 123 737-900ERs, nine 737-800s and five 787-8s.

A Lion Air order also helps Airbus further penetrate Indonesia, which is Southeast Asia’s largest airline market and has so far been dominated by Boeing. The only Airbus narrowbody operators in Indonesia are Indonesia AirAsia and Batavia Air, but these carriers are much smaller than Lion, which has 44% domestic market share.

Meanwhile, Singapore leasing company BOC Aviation has concluded a deal with Lion on the sale and leaseback of Boeing 737s, the first such contract between the two companies.

The sale and leaseback agreement includes six Boeing 737-800s and three Boeing 737-900ERs, BOC Aviation says. These aircraft are future deliveries that Lion will sell to BOC.

Lion is the world’s largest customer for 737-900ERs, but could convert some these orders to 737-800s because aircraft leasing companies generally prefer the 737-800 as there are more operators of the type.

The three 737-900ERs will be the first of this variant added to BOC Aviation's portfolio, says the lessors's Deputy Managing Director Steven Townend, who adds that there is evidence the 737-900ER customer base is expanding. “We’ve seen quite considerable growth in customers of the 737-900ER,” he notes.

Airport congestion is becoming an issue in many parts of the world, and many airlines are responding to this by up-gauging to 737-900ERs or Airbus A321s, Townend says, and to adapt to this shift BOC Aviation recently converted some of its A320s on order to A321s. Etihad Airways, for instance, which has traditionally leased A320s from BOC now wants A321s, Townend notes.