Indonesia's Lion Air to Buy Boeing 787s for New Premium Unit

Date : 06/08/2012 @ 12:37PM
Source : Dow Jones News
Stock : Boeing Company (The) (BA)
Quote : 210.28  -0.6 (-0.28%) @ 4:00PM

Indonesia's Lion Air to Buy Boeing 787s for New Premium Unit

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   By Doug Cameron 
 

Boeing Co. (BA) said Friday that Indonesia's Lion Air had committed to acquire 787 Dreamliner aircraft for a new full-service airline unit, just as rivals focus on establishing separate no-frills operations.

Lion Air is already one of Boeing's largest customers and has ordered hundreds of its new-generation 737 single-aisle planes for domestic and regional operations.

The fast-growing carrier plans to establish a new unit called Batik Air that would use twin-aisle 787s alongside the smaller 737s earmarked for flights to other parts of Asia and Australia.

Boeing didn't detail how many Dreamliners Lion Air planned to order for the new unit, though recent industry speculation said the companies were discussing a deal involving 10 of the fuel-efficient aircraft.

Closely held Lion Air wasn't immediately available for comment. Local media reports said the carrier aimed to launch Batik Air in 2013.

Though Boeing has a huge backlog for its 787, Lion Air's orders may provide it with leverage to gain early delivery spots. However, it is likely the carrier would have to wait several years before securing Dreamliners to launch longer-haul routes to Europe and North America in competition with Garuda Indonesia (GIAA.JK), the country's flag carrier.

-Write to Doug Cameron at doug.cameron@dowjones.com.

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