JAL says 787 grounding to cut profit by $19 million

(Reuters) - The grounding of Boeing's (BA.N) 787 Dreamliner is likely to cut Japan Airlines Co Ltd's (9201.T) operating profit between mid-January and the end of May by 1.8 billion yen ($18.97 million).
The two months to end-May will slice 1.1 billion yen from JAL's profit, President Yoshiharu Ueki said on Tuesday, on top of the 700 million yen the idled Dreamliners cost the airline between mid-January and the end of March.
JAL expects operating profit of 186 billion yen for the financial year ending March 31.
Japan Airlines' seven 787 Dreamliner jets have been grounded since mid-January after problems with its lithium-ion battery.
Boeing last week unveiled a new battery system and predicted the 787 would fly again within weeks rather than months.
Asked when JAL will resume Dreamliner flights, Ueki did not give a specific timetable.

 

"Boeing has said several weeks and we are making sufficient preparations because that could be the quickest scenario. But at this stage we are not thinking of when exactly they will resume," he told reporters.
JAL's decision will depend on how aviation authorities in the United States and Japan will respond, Ueki said.
Its rival All Nippon Airways (9202.T), which with 17 Dreamliners is the aircraft's biggest user, said this week that Boeing's goal to have the jets back in the air within weeks was a best-case scenario, and too uncertain to plan its return to service.
JAL is preparing to negotiate with Boeing on possible compensation related to the Dreamliner grounding, Ueki said, but he did not give details.
"We will start negotiations at an appropriate period. But honestly speaking,I want Boeing to focus on making improvements on the jets rather than bothering them about this now," he said.
($1 = 94.89 Japanese yen)

UPDATE 1-JAL says 787 grounding to cut profit by $19 mln

(Reuters) - The grounding of Boeing's 787 Dreamliner is likely to cut Japan Airlines Co Ltd's operating profit between mid-January and the end of May by 1.8 billion yen ($18.97 million).
The two months to end-May will slice 1.1 billion yen from JAL's profit, President Yoshiharu Ueki said on Tuesday, on top of the 700 million yen the idled Dreamliners cost the airline between mid-January and the end of March.
JAL expects operating profit of 186 billion yen for the financial year ending March 31.
Japan Airlines' seven 787 Dreamliner jets have been grounded since mid-January after problems with its lithium-ion battery.

 

Boeing last week unveiled a new battery system and predicted the 787 would fly again within weeks rather than months.
Asked when JAL will resume Dreamliner flights, Ueki did not give a specific timetable.
"Boeing has said several weeks and we are making sufficient preparations because that could be the quickest scenario. But at this stage we are not thinking of when exactly they will resume," he told reporters.
JAL's decision will depend on how aviation authorities in the United States and Japan will respond, Ueki said.
Its rival All Nippon Airways, which with 17 Dreamliners is the aircraft's biggest user, said this week that Boeing's goal to have the jets back in the air within weeks was a best-case scenario, and too uncertain to plan its return to service.
JAL is preparing to negotiate with Boeing on possible compensation related to the Dreamliner grounding, Ueki said, but he did not give details.
"We will start negotiations at an appropriate period. But honestlyspeaking,IwantBoeingtofocusonmakingimprovements on the jets ratherthanbotheringthem about this now," he said.

Japan agency: preparations for Dreamliner test flight not yet complete

(Reuters) - Japan's Civil Aviation Bureau said on Friday that preparations are not yet complete for any test flight of Boeing Co's (BA.N) grounded 787 Dreamliner this week.
"It's Thursday (in the United States) and nothing has been set," said Shigeru Takano, a senior safety official at the Civil Aviation Bureau (CAB). "There are a number of steps it needs to take before a test flight," he told a news briefing.

 

Boeing Co (BA.N) plans to conduct two flight tests of its revamped 787 battery system, as soon as the end of the week, three sources familiar with the matter told Reuters on Wednesday. The aircraft maker has predicted the Dreamliner could return to operation within weeks.
Test flights would mark a step toward Boeing's goal of returning the jet to service in weeks, after it was grounded worldwide in January after batteries overheated on jets owned by All Nippon Airways Co Ltd (9202.T) and Japan Airlines Co Ltd (9201.T).
Japan's aviation regulator last week criticized as inappropriate remarks made by Boeing executives at a March 15 press briefing in Tokyo who said that the cause of the battery fault may never be found. CAB also said it was too early to estimate that the 787 would return to operation within weeks.
The National Transportation Safety Board (NTSB) in the U.S. said Boeing (BA.N) did not inform investigators of what it planned to say about the Dreamliner jets during last week's briefing in Tokyo, Bloomberg reported on Thursday.
Boeing's position was "inconsistent with our expectations" from a company involved in an accident probe, National Transportation Safety Board (NTSB) general counsel David Tochen wrote in a letter, according to Bloomberg.
"We have received the correspondence, and remain fully committed to support the NTSB and other regulatory authorities in their investigations into the cause of the 787 battery incidents, and also continue our around-the-clock efforts to return the 787 fleet to service," Boeing spokesman Marc Birtel told Bloomberg.
Boeing could not immediately be reached for comment by Reuters outside of regular U.S. business hours.

Boeing plans 787 battery test flights for end of week: sources

(Reuters) - Boeing Co plans to conduct two flight tests of its revamped 787 battery system, possibly as soon as the end of the week, according to three sources familiar with the matter.

The 787 flights, the first since February, would mark another step toward Boeing's recently announced goal of returning the grounded jet to service in a matter of weeks, not months.

Regulators banned the plane from the skies in January after lithium-ion batteries burned on two 787s in quick succession that month. The Federal Aviation Administration gave Boeing permission for a single "ferry" flight on February 7 to move a jet to Washington state from Texas, carrying minimal crew and no passengers.

Boeing declined to comment.
The FAA on March 12 approved Boeing's plan to test a redesigned battery system, to prove it is safe. The FAA-approved plan includes a rigorous battery testing standard Boeing helped develop but did not previously use.

Boeing said last week that it was one-third of the way through the testing, and expected to finish in a week or two. Boeing's prediction drew skepticism from some regulators and industry experts, who said it was too early to say when the Dreamliner would fly again with the root cause of the battery overheating still unknown.

The testing regimen set by the FAA requires one flight test. But Boeing plans to conduct two flights: One for its own purposes and a second to gather data to submit for FAA approval, according to the sources, who spoke on condition that they not be named.

The flights could still be delayed by weather or other factors. Flight plans for the events had not yet been filed with the FAA.

The flights would depart from and return to Paine Field, an airport adjacent to the factory in Everett, Washington, where the 787 Dreamliner is made.

Airbus wins record order for 234 planes from Indonesia's Lion

The European-owned planemaker Airbus has won a record order for 234 planes worth 18.4bn euros (£15.7bn, $24bn) from Indonesia's Lion Air.

The order trumps last year's record order for 230 Boeing planes - also from Lion Air.

The planes will be made in France and will secure 5,000 jobs there, where the unemployment rate is high at about 10%.

Lion, now a major airline in Indonesia, started up just 13 years ago.

The two orders, once fulfilled, would put the airline in the world's top 10 by number of aircraft, although Lion Air is banned from flying within both the 27-nation European Union and the US. because of fears that its safety standards are not up to scratch.

Lion currently has just 92 Boeing planes, which fly mainly within Indonesia but also to Saudi Arabia.

It operates the low-cost aircraft carrier model and holds about a 45% market share in Indonesia, a country spread across around 6,000 inhabited islands with a population of 240 million people.

Indonesia air traffic is forecast to grow at 20% a year, and the country's economy is growing at about 6% a year.

French President Francois Hollande said the deal should act as a shop window for France's manufacturing abilities: "Airbus is a national and European pride, one of the pillars of our economy.

"The big Airbus contracts are an example for our economy, what it can do, what it must do."

The planes are all in the A320 family of planes and the first are due for delivery in 2014.

Airbus makes civilian craft for the aerospace and defence consortium EADS, which is owned by France, Germany and Spain.

The UK is also banking on fast growth in the civil aviation market.

The government announced a £2bn investment in the UK aviation industry, with half being provided by itself and the other half by aerospace firms.

Business Secretary Vince Cable said the sector was substantial within the UK.

"Our aerospace sector already supports more than 3,000 companies and employs 230,000 people across the UK," he said. "The potential for growth is huge. By 2031 the civil aerospace market will be worth in excess of $4.5 trillion."

Lion Air orders 234 A320 family aircraft

Indonesia’s Lion Air Group has placed a firm order with Airbus for 234 A320 family aircraft, comprising 109 A320neos, 65 A321neos and 60 A320ceos. This is Lion Air’s first Airbus order.

Lion Air will use the aircraft to meet growth requirements on its expanding domestic and regional route network. The carrier will announce engine selections for the aircraft in the near future.

The Group’s co-founder and CEO Rusdi Kirana said, “This landmark order will ensure that the Lion Air Group will continue its expansion with one of the most modern and advanced fleets in the world.”

Lion Air Group flies to more than 70 destinations in Indonesia and Southeast Asia.

http://atwonline.com/airframes/lion-air-orders-234-a320-family-aircraft 

Turkish Airlines orders more than 100 Airbus narrowbodies

Turkish Airlines has signed a contract for up to 117 A320 family aircraft, including 25 A321ceos, four A320neo, 53 A321neos and options for 35 additional A321neos.

It is the largest ever placed by a Turkish carrier.

Turkish Airlines already operates 75 A320 family aircraft. Turkish Airlines said the new order will allow it to expand short to medium-haul routes from its Istanbul hub, while the aircraft’s commonality with their existing Airbus fleet will generate additional cost-savings.

The A320neo will enter into service from late 2015, followed by the A319neo and A321neo in 2016, Turkish said.

In February, the carrier ordered five more Airbus A330-300s on top of the 15 A330-300s it ordered in October. And in December Turkish firmed a commitment for 15 Boeing 777-300ERs plus five options.

An engine selection for the new Airbus narrowbodies will be made later, the carrier said.

http://atwonline.com/airframes/turkish-airlines-orders-more-100-airbus-narrowbodies 

Root cause of 787 battery issues may never be found: Boeing

Boeing says the root cause of the 787 battery failures may never be established, but that it is moving ahead with a solution aimed at getting the aircraft back in the air.

The 787 fleet was grounded on 16 January following two incidents in which their lithium-ion batteries failed after overheating and leaking electrolyte, resulting in significant charring.

In the first incident, an auxiliary power unit battery on a Japan Airlines 787 failed while the aircraft was on the ground at Boston Logan International Airport, while in the second incident, an All Nippon Airways 787 had to be diverted to Takamatsu in Japan after the crew received a cockpit alert saying that the main battery had failed.

Boeing and battery manufacturer GS Yuasa have been working with the Japan Transport Safety Bureau and the US National Transportation Safety Board to investigate the battery incidents, but no definitive cause has been found for the battery faults so far.

"In the events of Logan and Takamatsu, we may never get to a single root cause, but the process we applied to understand the improvements that can be made is the most robust process that we have ever followed," says Boeing's vice-president and chief project engineer, Mike Sinnett.

Boeing has proposed significant changes to the battery system aimed at making it easier to cool the lithium-ion cells, as well as a new containment solution which would prevent overheated battery cells from starting a fire.

It has also reworked the battery charger with reduced maximum charging levels, a higher maximum discharging level and a softened charging sequence.

The US Federal Aviation Administration has approved a certification plan for the modified systems, which will undergo rigorous laboratory testing and a validation flight test before being certified for use on the global 787 fleet.

http://www.flightglobal.com/news/articles/root-cause-of-787-battery-issues-may-never-be-found-boeing-383483/

Turkish unveils huge A320 family order, including 57 Neos

Turkish Airlines has revealed plans to order up to 117 Airbus single-aisles in a deal that includes the current version of the A320 and the re-engined A320neo family.

The Star Alliance carrier's board of directors has announced a firm order 82 A320 family aircraft along with 35 options. The firm order comprises 25 A321s, four A320neos and 53 A321neos, with deliveries due to begin in 2015. The airline has also taken options for 35 A321neos.

No engine selection has been announced for either the current or re-engined versions. According to Flightglobal's Ascend Online database, the airline currently operates 76 A320 family aircraft. The majority of these are powered by International Aero Engines V2500 engines, although a small number are equipped with CFM International CFM56s.

Turkish says that the deal will take its fleet to 375 aircraft, including freighters. The airline's current fleet comprises 211 aircraft, and this increase to 235 by year-end.

http://www.flightglobal.com/news/articles/turkish-unveils-huge-a320-family-order-including-57-neos-383499/

Boeing details 787 battery redesign, rebuts safety claims

Boeing has disclosed that the 787 battery redesign package will include an improved battery charger, as the company delivered its most detailed and forceful description of the design changes and defence of its actions.

The new battery charger unit adds to several previously-disclosed new protections to allow the 787 to return to flight, possibly within weeks, with a pair of GS Yuasa's 32V lithium-ion batteries providing start-up and back-up power onboard the aircraft.

Boeing's certification plan, which was approved two days ago by the US Federal Aviation Administration, calls for hundreds of hours of laboratory testing and a single flight test to validate the systems.

"That will be the extent of flight testing," says Mike Sinnett, Boeing 787 chief project engineer. "It's not an extensive flight testing programme."

Ray Conner, chief executive of Boeing Commercial Airplanes, flew to Tokyo to brief Japanese transport regulators, and also hosted a public webcast to describe the plan in detail.

"We're here this week to discuss our solution and take feedback from the Japanese authorities and our customers," Conner says.

The battery redesign features a new charger with reduced maximum charging levels, a higher maximum discharging level and a softened charging sequence.

The charger is being improved even as safety investigators continue to search for the root cause of the short-circuits that led to two battery failures in January. It also addresses one of the paradoxes of the investigation. Overcharging is the only possible cause of a thermal runaway event, Boeing says, but neither 787 battery incident involved an over-charged battery based on the flight data recorders.

Boeing also revealed how it has redesigned the battery enclosure to "eliminate" the possibility of a fire caused by an over-heating battery. The enclosure now allows the electrolytes within the battery to vent if they become overheated within the battery box. Any fumes emitted by the electrolyte are then vented directly offboard through a newly-installed, dedicated vent line.

"This enclosure keeps us from ever having a fire to begin with," Sinnett says.

Boeing is keeping the same GS Yuasa batteries in the 787, but redesigning the layout of the eight cells. Instead of the formerly densely-packed unit, there are now empty spaces between each of the cells. The spaces are intended to absorb heat in case any individual cell malfunctions and overheats, rather than spread the thermal runaway event in a chain reaction around the battery.

Boeing also is "enhancing" the manufacturing process for each cell and the battery as a whole. The voltage range also is being tightened.

The goal is prevent a battery malfunction from occurring in the first place. If it does happen, the empty spaces between the cells should help prevent a thermal runaway, and the dedicated vent should prevent any damage within the aircraft.

Boeing also clarifies what it called several "misconceptions" about the severity of the battery incidents, which had been described by safety investigators as involving flames and, in one case, an "explosion".

In fact, the main battery on the All Nippon Airways 787 that made an emergency landing atTakamatsu, Japan, never caught fire. The auxiliary power unit battery on the Japan Airlines 787 inBoston did catch fire, but it was limited to two, 7.62cm (3in) flames, Sinnett says.

"We can say with certainty that after the battery failed, the airplane responded exactly the way we had designed," Sinnett says.

In Boeing's view, neither incident met the company's internal definition for the condition called "thermal runaway". That is a situation in which there "is so much energy, so much heat and so much flame that it would put the airplane at risk", Sinnett says. "We know very clearly this was not the case in the Logan event and the Takamatsu event."

Boeing now has to prove that the redesign package works. The company must first test and certificate the battery and enclosure changes, then install the new systems on the existing fleet before retrofitting aircraft that are undelivered or still in the production flow.

The return to flight process is continuing despite the lack of a conclusive root cause for the battery failures. Sinnett acknowledges that such a root cause may never be found and that 787 batteries might continue to have problems.

"Parts fail. We know that some day a battery may fail. We need to make sure there is no significant impact at the airplane level when it does."

http://www.flightglobal.com/news/articles/boeing-details-787-battery-redesign-rebuts-safety-claims-383475/

MAS finances last A380 with Islamic bond facility

Malaysia Airlines closed financing on its final Airbus A380 aircraft using the proceeds from an existing Islamic bond facility.

The aircraft (MSN 114) is Airbus' 100th A380 delivery.

The Bai Bithaman Ajil Islamic financing arrangement was established in November 2012 through Turus Pesawat, a special purpose company wholly-owned by the Malaysian ministry of finance. It raised up to ringgit (M$) 5.3 billion ($1.73 billion) for the financing of eight Airbus aircraft, including six A380-800s, one A330-200F and one A330-300.

Notes issued under the bond have an effective tenure of up to 20 years.

MAS says that the funds will go towards pre-delivery payments, to pay down the balance of the purchase price including buyer furnished equipment as well as the redemption of any bridging facility or credit line undertaken by the carrier in relation to the aircraft purchases.

http://www.flightglobal.com/news/articles/mas-finances-last-a380-with-islamic-bond-facility-383436/ 

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 

Lion Air unveils order for over 230 Airbus jets

Indonesian carrier Lion Air is ordering 234 Airbus twinjets, including 174 from the re-enginedA320neo family.

Its firm agreement covers 109 A320neo and 65 A321neo, and will also feature 60 current A320 jets.

They will be delivered over 2014-26. Airbus values the agreement at $24 billion at catalogue prices.

"The fuel-efficient A320 Family will enable Lion Air to achieve the lowest possible operating costs and continue to offer the most competitive fares in the Asian region," says Lion Air chief Rusdi Kirana.

"This landmark order will ensure that the Lion Air group will continue its expansion with one of the most modern and advanced fleets in the world."

Lion Air has been a loyal Boeing customer, and had previously unveiled a deal for over 200 737 Maxaircraft, as part of an agreement for up to 380 737s.

http://www.flightglobal.com/news/articles/lion-air-unveils-order-for-over-230-airbus-jets-383551/ 

Boeing 787 circuit board and battery problems don't seem linked: Japan

(Reuters) - A Japanese transport ministry official said on Friday that it knew of past incidents involving circuit boards on Boeing Co Dreamliners operated by All Nippon Airways Co (ANA), but authorities do not think they are linked to the jet's battery problems.

ANA, which along with Japan Airlines Co has nearly half of the 50 Dreamliners delivered to date, said this week there had been three instances of electric distribution panel trouble in its 787 jets before it grounded the aircraft in January. It also said it had to replace the panel twice.

Airbus wins major order from Indonesia's Lion Air

Europe’s Airbus has landed a record order worth more than $18 billion with Indonesia’s budget carrier Lion Air, the French presidency announced Monday, adding that it would create 5,000 jobs in France over the next 10 years.

By FRANCE 24 

 

Europe’s Airbus has landed a record order worth $18.4 billion at list prices from Indonesia’s Lion Air, the French presidency said on Monday, adding that the deal will create 5, 000 jobs in France over the next ten years.

In a sign of the rising importance of Asian budget carriers for high-tech manufacturing jobs, the deal was announced on Monday at a ceremony overseen by French President François Hollande.

The red-carpet event mirrors a record 201-plane order for equivalent Boeing aircraft from Lion Air signed in front of visiting U.S. President Barack Obama in late 2011, sparking European claims of U.S. political pressure which Washington and Boeing denied.

Lion Air founder Rusdi Kirana could not immediately be reached for comment.

Southeast Asia has emerged as one of the most fertile markets for popular medium-haul jets built by Airbus and Boeing, as rising incomes and a growing middle class boost air traffic.

Indonesia’s 17,000 islands and relatively robust economy, well insulated from Europe’s financial crisis, have made the world’s largest archipelago a magnet for aircraft sellers.

Its domestic aviation market, serving the world’s fourth largest population, is growing at 21 percent annually.

Reuters reported last week the two leading jetmakers were scrapping over a potentially rapid new order from Lion Air.

French newspaper Les Echos reported in its early Monday edition that the order, for over 200 Airbus jets, would include many of the newest fuel-saving type of A320, worth $100 million each.

Airasia rivalry

While below a recent peak, airplane demand remains robust as airlines and lessors modernize fleets to drive down fuel costs, while emerging market growth continues almost unchecked.

However, there have been suggestions growth is cooling, prompting some carriers to buy aircraft only to lease them out.

In deals totalling $35 billion, Germany’s Lufthansa last week ordered 102 Airbus and Boeing jets, Turkish Airlines picked up 82 from Airbus and Ireland’s Ryanair is expected to sign for 170 Boeings.

The values represent official prices but in practice, strategic airlines win significant discounts for big orders.

The Lion Air order marks at least the third attempt by Airbus to woo Lion Air, long seen as a fortress for Boeing.

It is likely to throw the spotlight on an intense battle for market share between the largest planemakers.

It is also likely to add zest to a regional battle for supremacy between Lion Air and AirAsia, the low-cost carrier founded by Malaysian entrepreneur Tony Fernandes.

Lion Air is about to start up a domestic Malaysian rival to AirAsia, which has long been exclusively an Airbus operator. Some industry watchers have warned of a potential price war.

The airlines are respectively among the top buyers of Boeing and Airbus jets. Airlines rarely switch suppliers because of re-training costs and the burden of keeping extra spares, but the practice of “flipping” has grown as market share battles raged.

The Lion Air deal will be signed at the launch of France’s ‘Industry Week’ as part of efforts to boost domestic manufacturing. Airbus aircraft are built mainly in the planemaker’s founder nations France, Germany, Spain and Britain.

Boeing outsold Airbus in 2012 for the first time in six years and remains ahead this year, according to monthly data.

http://www.france24.com/en/20130318-airbus-major-order-indonesia-lion-air-a320-france

Airbus wins landmark Lion Air order - sources

(Reuters) - Europe's Airbus has landed a record order potentially worth $20 billion (13.2 billion pounds) at list prices from Indonesia's Lion Air, sources familiar with the matter said on Sunday, smashing rival Boeing's grip on one of the world's fastest-growing airlines.

In a sign of the rising importance of Asian budget carriers for high-tech manufacturing jobs, the deal is set to be announced on Monday at a ceremony overseen by French President Franciois Hollande, the sources said, asking not to be named.

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EADS subsidiary Airbus declined comment.

France said earlier Hollande would meet Airbus Chief Executive Fabrice Bregier on Monday to celebrate "a major industrial deal," but withheld further details.

The red-carpet event mirrors a record 201-plane order for equivalent Boeing aircraft from Lion Air signed in front of visiting U.S. President Barack Obama in late 2011, sparking European claims of U.S. political pressure which Washington and Boeing denied.

The sources said the new Airbus A320-family order from Lion Air, founded by travel entrepreneur Rusdi Kirana, could top that number.

Kirana could not immediately be reached for comment.

Southeast Asia has emerged as one of the most fertile markets for popular medium-haul jets built by Airbus and Boeing, as rising incomes and a growing middle class boost air traffic.

Indonesia's 17,000 islands and relatively robust economy, well insulated from Europe's financial crisis, have made the world's largest archipelago a magnet for aircraft sellers.

Its domestic aviation market, serving the world's fourth largest population, is growing at 21 percent annually.

Reuters reported last week the two leading jet makers were scrapping over a potentially rapid new order from Lion Air.

French newspaper Les Echos reported in its early Monday edition that the order, for over 200 Airbus jets, would include many of the newest fuel-saving type of A320, worth $100 million each.

AIRASIA RIVALRY

While below a recent peak, airplane demand remains robust as airlines and lessors modernize fleets to drive down fuel costs, while emerging market growth continues almost unchecked.

However, there have been suggestions growth is cooling, prompting some carriers to buy aircraft only to lease them out.

In deals totalling $35 billion, Germany's Lufthansa last week ordered 102 Airbus and Boeing jets, Turkish Airlines picked up 82 from Airbus and Ireland's Ryanair is expected to sign for 170 Boeings.

The values represent official prices but in practice, strategic airlines win significant discounts for big orders.

The Lion Air order marks at least the third attempt by Airbus to woo Lion Air, long seen as a fortress for Boeing.

It is likely to throw the spotlight on an intense battle for market share between the largest plane makers [ID:nL6E8I915E].

It is also likely to add zest to a regional battle for supremacy between Lion Air and AirAsia, the low-cost carrier founded by Malaysian entrepreneur Tony Fernandes.

Lion Air is about to start up a domestic Malaysian rival to AirAsia, which has long been exclusively an Airbus operator. Some industry watchers have warned of a potential price war.

The airlines are respectively among the top buyers of Boeing and Airbus jets. Airlines rarely switch suppliers because of re-training costs and the burden of keeping extra spares, but the practice of "flipping" has grown as market share battles raged.

The Lion Air deal will be signed at the launch of France's 'Industry Week' as part of efforts to boost domestic manufacturing. Airbus aircraft are built mainly in the plane maker's founder nations France, Germany, Spain and Britain.

Boeing outsold Airbus in 2012 for the first time in six years and remains ahead this year, according to monthly data.

AirAsia buys into Zest Airways, seeking growth in Philippines

(Reuters) - The Philippine unit of Asia's biggest budget airline AirAsia Bhd (AIRA.KL) has agreed to acquire 49 percent of small-scale regional carrier Zest Airways, as it moves to turn its Philippinebusiness into a money-making operation.

AirAsia, which has moved aggressively into new markets and placed huge jet orders to build a modern fleet, said last month it wants to focus on its core Malaysian, Thai and Indonesia routes, then grow its Philippine and Japanese routes profitably.

Philippines AirAsia Inc, which is 40 percent owned by Malaysia-listed AirAsia, will acquire the stake in Manila-based Zest Airways via a share swap. Both firms declined to give the value of the deal.

Zest has a fleet of only 11 aircraft, compared with AirAsia which has more than 100 in service and hundreds more on order.

Zest flies from Ninoy Aquino International Airport in Manila to other towns in the Philippines, plus Shanghai and Taipei.

Philippines AirAsia, which is 60 percent owned by a Filipino group that includes Chief Executive Marianne Hontiveros and Antonio "Tonyboy" Cojuangco, competes with budget carrier Cebu Air Inc (CEB.PS) in the Philippines. As well as internal destinations, it runs daily flights to Kuala Lumpur and Kota Kinabalu in Malaysia.

"This strategic partnership is all about growing the market," AirAsia group CEO Tony Fernandes told reporters.

Zest's owner, Philippine businessman Alfredo Yao, will get a 15 stake in the AirAsia unit.

Last week the Indian government approved AirAsia's proposal to set up an airline jointly with the Tata group, paving the way for the first foreign carrier to enter the Indian domestic aviation sector.

Boeing names new leaders for 777X, 737MAX programs

(Reuters) - Boeing Co (BA.N) named new leaders for its 777X and 737 MAX commercial airplane programs and replaced the head of its engines division.

Boeing Commercial Airplanes Chief Executive Officer Ray Conner named Bob Feldmann to lead development of the forthcoming 777X, a derivative of the successful wide-body 777 jet. Feldmann formerly led development of the 737 MAX, taking it to firm concept.

The 777X is still not in the firm concept stage, and airlines are pressingBoeing to deliver the newer, more efficient variant as soon as possible. Boeing has promised it by the end of the decade.

Keith Leverkuhn, former head of the engines unit, known as the propulsion systems division, will succeed Feldmann on the 737 MAX, Conner said.

Feldmann and Leverkuhn will report to Scott Fancher, who was named head of airplane development in December.

Nicole Piasecki will succeed Leverkuhn as head of propulsion. The company also created a marketing and business development unit to "decipher the marketplace and prove the value of our products and services." The unit will include environment and aviation policy, product strategy, services strategy and strategic planning and analysis.

Fancher, as head of airplane development, oversees design and flight certification of planes that are currently on the drawing boards, including the 737 MAX, the 767 Tanker and 787-9.

Ryanair poised to reveal 200-plane Boeing deal - sources

(Reuters) - Ryanair (RYA.I) is close to unveiling a landmark $15 billion order for around 170 passenger jets from U.S. aircraft manufacturer Boeing Co(BA.N), sources familiar with the matter said on Tuesday.

The order for current-generation 737 aircraft delivers a boost to the U.S. company, which also won U.S. approval for test flights for its grounded 787 Dreamliner on Tuesday.

Reuters reported exclusively in late January that Ryanair was closing on a deal for at least 150 current-generation 737NG passenger jets to be completed within weeks.

A Ryanair spokesman on Tuesday said the company did not comment on "rumor or speculation."

The company has said it is in talks with Boeing about a large deal that would likely be signed later in the year. In January, it denied that a deal was imminent.

A Boeing spokeswoman said the company did not discuss customer order negotiations as a matter of policy.

Boeing and Airbus are upgrading their medium-haul passenger models to offer about 15 percent fuel savings from the middle of the decade, raising the prospect of bargains on the outgoing models to help manufacturers ensure steady production.

The industry benchmark 737-800 model is worth $89.1 million at list prices, but large orders attract steep discounts and industry appraisers value the plane closer to $40 million.

The Irish Independent said a deal for 200 planes would be announced at a meeting between U.S. President Barack Obama and Irish Prime Minister Enda Kenny at the White House during an annual reception to mark St. Patrick's Day.

A spokesman for the Irish prime minister declined to comment on the Irish newspaper's report.

The large order will help Boeing achieve a smooth transition between old and new models while trying to keep production steady, address sing a key priority for suppliers and investors.

Boeing's stock rose 1.5 percent on Tuesday to close at $84.16.