Bloomberg News

Lion Air May Convert 787 Orders, Call Bids for Planes (Correct)

January 27, 2014

PT Lion Mentari Airlines, Indonesia’s biggest carrier, may convert an order for five Boeing Co. (BA:US) Dreamliners and then call new bids to buy planes with more than 250 seats amid a boom in domestic traffic.

The carrier wants to deploy wide-body aircraft on domestic routes amid difficulty in getting airport slots on sectors such as from capital Jakarta to Medan, Chief Executive Officer Rusdi Kirana said today. Lion Air will also consider an initial public offering within the next two years, Kirana said in Batam, Indonesia.

From Singapore to Vietnam, carriers in Southeast Asia are buying new aircraft as about 600 million people -- or the combined population of the U.S., Germany and Brazil -- fly more. Boeing and Airbus Group NV, the world’s two biggest planemakers, both count on Asian airlines to buy more aircraft in the next two decades as economic growth in the region enables more people to take flights.

The carrier will convert its order for five Boeing 787s to smaller, single-aisle aircraft, Kirana said, declining to elaborate on new orders.

Lion Air already has 700 planes on order and expects to have ordered 1,000 aircraft within two to three years, Kirana said in March. The Jakarta-based carrier agreed to buy 230 Boeing 737 planes in 2012 and ordered 234 planes from Airbus in March.

The Indonesian carrier has relied on self-funding and bank loans to fund aircraft purchase in the past, Kirana said today.

To contact the reporter on this story: Jasmine Ng in Singapore at jng299@bloomberg.net

To contact the editor responsible for this story: Anand Krishnamoorthy at anandk@bloomberg.net


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