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Sunday, June 10, 2012

UPDATE: Indonesia's Lion Air to Buy 5 Boeing 787s for Premium Unit

Boeing Co. (BA) said Friday that Indonesia'sLion Air had committed to acquire five 787 Dreamliner aircraft for a new full-service airline unit, just as rivals focus on establishing separate no-frills operations.

Lion Air is already one of Boeing's largest customers and has ordered hundreds of its new-generation 737 single-aisle planes for domestic and regional operations.

The fast-growing carrier plans to establish a new unit called Batik Air that would use twin-aisle 787-8s alongside the smaller 737s earmarked for flights to other parts of Asia and Australia.

Lion hasn't signed a final order with Boeing, which said a completed deal would be worth $967.5 million at list prices.

Closely held Lion Air wasn't immediately available for comment. Local media reports said the carrier aims to launch Batik Air in 2013.

Though Boeing has a huge backlog for its 787, Lion Air's orders may provide it with leverage to gain early delivery spots. However, it is likely the carrier would have to wait several years before securing Dreamliners to launch longer- haul routes to Europe and North America in competition with Garuda Indonesia (GIAA.JK), the country's flag carrier.

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