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scbriml
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Lion Air: Another Big Order. For Airbus?!

Tue Sep 25, 2012 11:22 am

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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PH-BFA
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RE: Lion Air: Another Big Order. For Airbus?!

Tue Sep 25, 2012 12:01 pm

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...
 
KaiTak747
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RE: Lion Air: Another Big Order. For Airbus?!

Tue Sep 25, 2012 2:03 pm

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  
 
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Stitch
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RE: Lion Air: Another Big Order. For Airbus?!

Tue Sep 25, 2012 3:35 pm

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]
 
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RobK
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RE: Lion Air: Another Big Order. For Airbus?!

Tue Sep 25, 2012 3:40 pm

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.
 
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scbriml
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RE: Lion Air: Another Big Order. For Airbus?!

Tue Sep 25, 2012 4:47 pm

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.   
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roseflyer
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RE: Lion Air: Another Big Order. For Airbus?!

Tue Sep 25, 2012 5:17 pm

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?
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airtanker
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RE: Lion Air: Another Big Order. For Airbus?!

Tue Sep 25, 2012 7:18 pm

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.
 
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RE: Lion Air: Another Big Order. For Airbus?!

Tue Sep 25, 2012 7:26 pm

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.  
 
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Stitch
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RE: Lion Air: Another Big Order. For Airbus?!

Tue Sep 25, 2012 7:32 pm

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.
 
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scbriml
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RE: Lion Air: Another Big Order. For Airbus?!

Tue Sep 25, 2012 8:38 pm

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.   
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Stitch
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RE: Lion Air: Another Big Order. For Airbus?!

Tue Sep 25, 2012 8:45 pm

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).
 
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RE: Lion Air: Another Big Order. For Airbus?!

Tue Sep 25, 2012 8:55 pm

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

        

How ignorant is it possible to be?!
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cosmofly
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RE: Lion Air: Another Big Order. For Airbus?!

Tue Sep 25, 2012 10:34 pm

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.
 
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Stitch
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RE: Lion Air: Another Big Order. For Airbus?!

Tue Sep 25, 2012 11:06 pm

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.
 
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scbriml
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RE: Lion Air: Another Big Order. For Airbus?!

Tue Sep 25, 2012 11:08 pm

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.
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RobK
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RE: Lion Air: Another Big Order. For Airbus?!

Wed Sep 26, 2012 12:03 am

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.
 
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scbriml
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RE: Lion Air: Another Big Order. For Airbus?!

Wed Sep 26, 2012 5:44 am

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.
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RE: Lion Air: Another Big Order. For Airbus?!

Wed Sep 26, 2012 6:51 am

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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RE: Lion Air: Another Big Order. For Airbus?!

Wed Sep 26, 2012 8:24 am

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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scbriml
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RE: Lion Air: Another Big Order. For Airbus?!

Wed Sep 26, 2012 11:16 am

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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