Airbus Wins $24 Billion Lion Air Order for 234 Airliners

Airbus SAS won an order from Indonesia’s PT Lion Mentari Airlines for 234 planes worth $24 billion at list price, giving the European planemaker entry into a market that competitor Boeing Co. (BA) has long dominated.

The order, announced at the French presidential palace in Paris, includes 60 current-generation A320s, 109 A320neos and 65 A321neos. Customers typically buy planes at discounts.

The Indonesian carrier needs more aircraft as it adds flights in a region where air travel is expected to grow more than 6.4 percent annually through 2031. Lion Air, which flies to more than 36 destinations within Indonesia and overseas, is establishing a low-cost carrier in Malaysia to challenge AirAsia Bhd. (AIRA), Airbus’s biggest A320 customer.

“We’ve always wanted to be a big player in Indonesia, a country of 17,000 islands and 240 million people,” John Leahy, chief salesman of Airbus, said in a telephone interview after the order was announced. “Boeing’s been dominant there for a long time and I think it’s important that in using planes like the A320neo we’re able to break into that market.”

Shares of Airbus parent European Aeronautic, Defence & Space Co. fell 1.4 percent to 42 euros at 1:27 p.m. in Paris.

Lion Air expects 20 percent growth in traffic this year, Rusdi Kirana, its president director, said at the signing ceremony with French President Francois Hollande, who said the order brought “honor” to European industry.

Major Orders

The carrier had already signed a record order with Boeing for 230 additional 737s in February last year. That deal was worth $22.4 billion at list prices. The purchase, which also included 150 options, was Boeing’s biggest in dollar value and plane numbers at the time.

Airbus has won major orders for its bestselling A320 family of planes in the past week, including 100 purchases fromDeutsche Lufthansa AG (LHA) and an order from Turkish Airlines (THYAO) for 82 A320-series planes worth $9.3 billion at list price. Leahy declined to comment on pricing for the Lion Air order.

Lion Air’s order pushes it into the ranks of the top five operators of Airbus single-aisle planes, after AirAsia BHD, Lufthansa, India’s IndiGo and EasyJet Plc.

Surging demand has allowed Airbus to take in about half the number of orders in the first quarter alone that it captured in all of 2012 for its A320 and A320neo series. Airbus won orders for 305 of the A320 series and another 478 for the A320neo last year.

The neo variant will offer a choice between engines by United Technologies Corp. (UTX)’s Pratt & Whitney or by CFM International, a joint venture between General Electric Co. (GE) andSafran SA (SAF) of France.

http://www.bloomberg.com/news/2013-03-18/airbus-wins-24-billion-lion-air-order-for-234-airliners.html