Boeing Signs Record $22.4B Contract with Indonesia’s Lion Air

Boeing (NYSE:BA) signed its the single-largest contract in commercial aviation history on Tuesday, with Indonesia’s Lion Air ordering 230 aircraft in a deal worth $22.4 billion.

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The announcement was made today at the Singapore Airshow, but the pending deal was first made public in November, on the sidelines of an Asia-Pacific summit in Bali, when it was estimated to be worth $21.7 billion.

Lion Air, Indonesia’s largest carrier by passenger volume, ordered 201 737 MAXs and 29 next-generation 737-900 ERs, and will acquire purchase rights for an additional 150 airplanes, Boeing said.

The single-aisle 737-Max is an upgraded and more fuel-efficient version of the 737, the world’s single best-selling commercial airplane. The 737-900ER is the extended-range variant.

Indonesia is the world’s fourth most populous nation, with some 240 million people. With more than 17,000 islands scattered across 33 provinces, and rising incomes as a result of steady economic growth, air travel in Indonesia has grown sharply in recent years.

Lion Air, a budget airline, carried 85,000 passengers a day domestically last year, and expects that figure to increase to 100,000 passengers daily by the end of this year. Lion Air already has a 51 percent share of the domestic market, and is aiming to raise it to 60 percent.

Rusdi Kirana, Lion Air’s founder and president director, says the carrier will go public once it gets a 60 percent share of the market.

Lion Air is also preparing for an open-skies agreement within the Association of Southeast Asian Nations (ASEAN), which would enable the carrier to expand further overseas, and might necessitate firming up its purchase rights for the 150 planes.

The first aircraft will be delivered in 2017, and deliveries will run through 2026.

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