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Lion Air: Another Big Order. For Airbus?!  
User currently offlinescbriml From United Kingdom, joined Jul 2003, 12404 posts, RR: 46
Posted (1 year 10 months 1 week 3 days 12 hours ago) and read 15447 times:
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It seems that Lion Air is close to placing another large order for planes, but this time with Airbus!

Although this order, assuming it materialises, breaks Boeing's monopoly at Lion Air, it may be that these planes are intended for Malindo Airways which is Lion Air's competition for AirAsia to be based in Malaysia. Even if that is the case, it's still a surprise that Lion Air wouldn't stick with what they already know and have large orders for.

TinyURL of Reuter's report: http://tinyurl.com/bnf7wdx

Quote:
PARIS, Sept 25 (Reuters) - Indonesia's Lion Air may add more jets to recent plane orders in order to keep pace with Southeast Asia's transport growth as a U.S. analyst said the airline may place a multi-billion-dollar order with Europe's Airbus.

Lion Air co-founder and chief executive, Rusdi Kirana, said on Tuesday that Southeast Asia's double-digit increase in air travel demand, spurred by economic growth and rising incomes, was set to continue.

"We think that in the next decade we will need a lot of aircraft," he told Reuters in a telephone interview. "The market is growing very fast. We are looking, but it depends on pricing and many other factors. We are talking, but we have not made any decisions."

U.S. aerospace analyst Scott Hamilton said however, that Lion Air was poised to order up to 100 Airbus jets, breaking Boeing's dominance at Indonesia's largest domestic airline.



I took a number of Lion Air flights earlier this year and was quite impressed. While they don't offer anywhere near the level of service that AirAsia does, their flights were CHEAP.

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20 replies: All unread, jump to last
 
User currently offlinePH-BFA From Netherlands, joined Apr 2002, 562 posts, RR: 1
Reply 1, posted (1 year 10 months 1 week 3 days 11 hours ago) and read 15201 times:

Quoting scbriml (Thread starter):
their flights were CHEAP

Sure it is cheap, however i would do anything to avoid this airline. They already had a fair amount of incidents and accidents, which is partly due to the lack of skilled and experienced flight crew. When considering their rapid future expansion I don't expect any improvement...


User currently offlineKaiTak747 From Switzerland, joined Aug 2012, 157 posts, RR: 0
Reply 2, posted (1 year 10 months 1 week 3 days 9 hours ago) and read 14699 times:

But the question is... where do Lion Air find the money to fund these gigantic orders? Over 350 737s, 20 787s and now Airbus NBs on order? Lionair is not EK, completely different business model of course, but even so... they will still need to generate huge profits to fund this expansion. Or there is an Indonesian billionaire or consortium behind it  

User currently offlineStitch From United States of America, joined Jul 2005, 30641 posts, RR: 84
Reply 3, posted (1 year 10 months 1 week 3 days 8 hours ago) and read 14400 times:
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Quoting KaiTak747 (Reply 2):
But the question is... where do Lion Air find the money to fund these gigantic orders?

For their latest 737-900ER deliveries, they're starting to issue asset-backed bonds guaranteed by the US Export-Import Bank. They also plan to use bank loans and sale-and-leaseback deals.

Mailndo Airways is a joint-venture between LionAir and the Malaysian defense contractor National Aerospace & Defence Industries Sdn Bhd, so I expect NADI has deep pockets.


Quoting KaiTak747 (Reply 2):
Lionair is not EK, completely different business model of course, but even so... they will still need to generate huge profits to fund this expansion.

With air travel in Indonesia said to be increasing some 20% per annum, it appears there is plenty of demand to support strong expansion.

[Edited 2012-09-25 08:38:00]

User currently offlineRobK From United Kingdom, joined Sep 2004, 3946 posts, RR: 18
Reply 4, posted (1 year 10 months 1 week 3 days 8 hours ago) and read 14352 times:

Seems like a weak article to me. No substance to it apart from some random guy's opinion. I could equally claim to be a UK aerospace analyst and post a story saying that Southwest was poised to place a large order with Airbus, but it wouldn't mean diddly squat without at least some evidence to support the possibility/chances/likelihood etc.

User currently offlinescbriml From United Kingdom, joined Jul 2003, 12404 posts, RR: 46
Reply 5, posted (1 year 10 months 1 week 3 days 7 hours ago) and read 14024 times:
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Quoting RobK (Reply 4):
No substance to it apart from some random guy's opinion.

With respect, Scott Hamilton is hardly a "random guy" or some teenage blogger.   



Time flies like an arrow, but fruit flies like a banana!
User currently offlineRoseflyer From United States of America, joined Feb 2004, 9511 posts, RR: 52
Reply 6, posted (1 year 10 months 1 week 3 days 6 hours ago) and read 13895 times:

Both speculations on further orders from Air Asia and Lion Air surprise me. Those airlines have massive orders on the books that more than triple the size of the airlines, yet somehow they can secure more planes and commitments for financing more?


If you have never designed an airplane part before, let the real designers do the work!
User currently offlineairtanker From United States of America, joined Jan 2004, 23 posts, RR: 0
Reply 7, posted (1 year 10 months 1 week 3 days 4 hours ago) and read 13161 times:
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Did anyone notice that the writer states:"The new carrier, Malindo Airways, will begin flights between Indonesia and Malaysia next May with a fleet of 12 Boeing 727 aircraft, which it plans to expand to 100 planes within a decade, Kirana said when announcing the launch."

To me, that makes all of this article somewhat suspect.


User currently offlinecosmofly From United States of America, joined May 2009, 649 posts, RR: 0
Reply 8, posted (1 year 10 months 1 week 3 days 4 hours ago) and read 13014 times:

Quoting KaiTak747 (Reply 2):
But the question is... where do Lion Air find the money to fund these gigantic orders?

You may have just provided the answer. Lion might have extracted all the money its credit allows out of the US tax payers (Exim bank) but they have yet to tap into EU tax payers' pocket.  


User currently offlineStitch From United States of America, joined Jul 2005, 30641 posts, RR: 84
Reply 9, posted (1 year 10 months 1 week 3 days 4 hours ago) and read 12893 times:
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Quoting airtanker (Reply 7):
To me, that makes all of this article somewhat suspect.

FlightGlobal noted that the first 12 frames will be 737-900ERs, so not sure where the media are picking up 727. I expect somebody fat-fingered it (meant to type 737) and nobody bothers to fact check when they source that original erroneous article.


User currently offlinescbriml From United Kingdom, joined Jul 2003, 12404 posts, RR: 46
Reply 10, posted (1 year 10 months 1 week 3 days 3 hours ago) and read 11931 times:
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Quoting airtanker (Reply 7):
Did anyone notice that the writer states:"The new carrier, Malindo Airways, will begin flights between Indonesia and Malaysia next May with a fleet of 12 Boeing 727 aircraft, which it plans to expand to 100 planes within a decade, Kirana said when announcing the launch."

It's a typo. It should be 737s (which will presumably come from Lion Air themselves). Which is a shame, because I was starting to plan a trip to see those 727s!   


So it seems that Lion Air (as an airline) will continue to stick with 737s but it looks as though Malindo Airways will be flying A320s once they start being delivered. Is this a similar situation to Norwegian? Hamlet69 was adamant that Norwegian would not be operating A320s.   



Time flies like an arrow, but fruit flies like a banana!
User currently offlineStitch From United States of America, joined Jul 2005, 30641 posts, RR: 84
Reply 11, posted (1 year 10 months 1 week 3 days 3 hours ago) and read 11848 times:
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Quoting cosmofly (Reply 8):
Lion might have extracted all the money its credit allows out of the US tax payers (Exim bank) but they have yet to tap into EU tax payers' pocket.  

It may very well be like American Airlines - with so many 737s on order, Lion Air can't secure new frames quickly enough to meet demand for another subsidiary, so they're going Airbus (since the fleet will be large enough to justify flying a different fleet).


User currently offlineairboe From San Marino, joined Jan 2011, 44 posts, RR: 0
Reply 12, posted (1 year 10 months 1 week 3 days 3 hours ago) and read 11639 times:

Quoting RobK (Reply 4):
No substance to it apart from some random guy's opinion

        

How ignorant is it possible to be?!



keep it free of the propellers
User currently offlinecosmofly From United States of America, joined May 2009, 649 posts, RR: 0
Reply 13, posted (1 year 10 months 1 week 3 days 1 hour ago) and read 10016 times:

Quoting Stitch (Reply 11):
Lion Air can't secure new frames quickly enough to meet demand for another subsidiary, so they're going Airbus

But Neo has a much bigger backlog. However A can always find slots if the order is attractive enough.


User currently offlineStitch From United States of America, joined Jul 2005, 30641 posts, RR: 84
Reply 14, posted (1 year 10 months 1 week 3 days ago) and read 9486 times:
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Quoting cosmofly (Reply 13):
But Neo has a much bigger backlog.

This assumes the order is for A320neos. It may be for the current model.


User currently offlinescbriml From United Kingdom, joined Jul 2003, 12404 posts, RR: 46
Reply 15, posted (1 year 10 months 1 week 3 days ago) and read 9435 times:
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Quoting cosmofly (Reply 13):
But Neo has a much bigger backlog.

I suspect the bulk, if not all, of this order will be for ceos. If they're required as quickly as the article suggests, they can't wait for neo or MAX.



Time flies like an arrow, but fruit flies like a banana!
User currently offlineRobK From United Kingdom, joined Sep 2004, 3946 posts, RR: 18
Reply 16, posted (1 year 10 months 1 week 2 days 23 hours ago) and read 8580 times:

Quoting scbriml (Reply 5):
With respect, Scott Hamilton is hardly a "random guy" or some teenage blogger

But yet this was the same "analyst" who told us many years ago that AA flying A320s would never happen. I'm sure you'll forgive me for taking his "opinion" with a pinch of salt.


User currently offlinescbriml From United Kingdom, joined Jul 2003, 12404 posts, RR: 46
Reply 17, posted (1 year 10 months 1 week 2 days 18 hours ago) and read 6158 times:
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Quoting RobK (Reply 16):
But yet this was the same "analyst" who told us many years ago that AA flying A320s would never happen.

So, because he said that "many years ago", he's now an idiot? Very few people would have disagreed with him "many years ago".

The article is written by a very respected aviation journalist and quotes, despite your opinion, a highly respected analyst. I'm prepared to give it credit it that basis. If Lion orders more 737s in a few weeks instead of A320s, you can come back and gloat.



Time flies like an arrow, but fruit flies like a banana!
User currently offlinefrigatebird From Netherlands, joined Jun 2008, 1577 posts, RR: 1
Reply 18, posted (1 year 10 months 1 week 2 days 17 hours ago) and read 5754 times:

Quoting cosmofly (Reply 13):
Quoting Stitch (Reply 11):Lion Air can't secure new frames quickly enough to meet demand for another subsidiary, so they're going Airbus
But Neo has a much bigger backlog. However A can always find slots if the order is attractive enough.

But, wasn't the Silkair defection from Airbus A320 to Boeing 737MAX all about the lack of production slots with Airbus?   



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User currently offlineAsiaflyer From Singapore, joined May 2007, 1129 posts, RR: 0
Reply 19, posted (1 year 10 months 1 week 2 days 15 hours ago) and read 5133 times:

Quoting frigatebird (Reply 18):
But, wasn't the Silkair defection from Airbus A320 to Boeing 737MAX all about the lack of production slots with Airbus?

Nope, it was due to very steep discount by Boeing.



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User currently offlinescbriml From United Kingdom, joined Jul 2003, 12404 posts, RR: 46
Reply 20, posted (1 year 10 months 1 week 2 days 12 hours ago) and read 4090 times:
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Quoting frigatebird (Reply 18):
But, wasn't the Silkair defection from Airbus A320 to Boeing 737MAX all about the lack of production slots with Airbus?



If you're talking about neo vs MAX, then quite possibly MAX is available sooner (given current larger neo backlog). But given the speed with which Lion needs these planes, I'm convinced they'll be ceos.

Quoting Asiaflyer (Reply 19):
Nope, it was due to very steep discount by Boeing.



I suspect the same two major factors that drive most aircraft acquisitions played a part - price and availability.



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