Tuesday, February 14, 2012

Boeing locks in biggest plane order with Lion Air

NEW YORK — Boeing has locked in its biggest order ever.

The Chicago airplane manufacturer said Tuesday that it has finalized an order from Indonesian carrier Lion Air for 230 planes — worth a combined $22.4 billion. Lion Air also has the rights to buy 150 more. The deal is the largest commercial airplane order ever for Boeing Co. by both dollar value and number of airplanes.

The order includes 201 of Boeing's redesigned 737, which it calls the Max, and 29 extended range 737-900s.

Until this deal was confirmed, Boeing's biggest confirmed order was from Southwest Airlines Co. That order for 208 planes is valued at $19 billion at list prices, but airlines commonly get discounts. Southwest will be the first customer to get the 737 Max, which is still in testing, when it's delivered in 2017.

Lion Air is Indonesia's largest private airline but it's still very small compared to most U.S. carriers. With a current fleet of 76 planes, it's about double the size of Spirit Airlines or Allegiant Travel Co., according to Airfleets.net. But it's just one-tenth the size of United Continental, the world's largest airline company. Lion Air is also relatively small compared with other Asian carriers. Singapore Airlines has a fleet of about 120 planes, while Japan's All Nippon Airways, the first customer for Boeing's 787 Dreamliner, has a fleet of 174.

The order adds to Boeing's recent momentum in its competition against European rival Airbus.

In November, Middle East carrier Emirates ordered $18 billion worth of long-range Boeing 777s. Southwest's order for 737s was placed in December.

Those orders followed a notable win for Airbus. In July, American Airlines said it will order 200 planes from Boeing, including 100 of the Max model. But American also for the first time ordered planes from Airbus — 260 A320s, the Airbus rival to the 737.

American and its parent, AMR Corp., are now operating under bankruptcy protection. A bankruptcy court judge will now decide whether the airline can go ahead with the ambitious order.

The 737 Max is Boeing's answer to the Airbus 320neo, another plane with new engines designed to boost fuel efficiency. That plane is due out in late 2015.

Boeing has been building the short- and medium-range 737 since the late 1960s. It has sold about 7,000 of them, making it the company's most popular plane ever. Workers on Boeing's assembly line in Renton, Wash., make about one every day, but the company plans to boost production by roughly one-third in 2014 to meet new orders.

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