Boeing has a big delivery for Indonesian airline

February 14, 2012

Chicago-based Boeing has locked in its biggest deal to date. The airplane manufacturing company is selling 230 planes for $22.4 billion to Lion Air, Indonesia's largest private airline. The bulk of the purchase is dedicated to Boeing’s fuel-saving 737 MAX planes. Lion Air is buying 201 of the models.  

Aviation consultant Scott Hamilton says the order gives Boeing a big boost.

“What this does for Boeing - it solidifies the future of the 737 line. It gives them a good tough competitor against Airbus and its A320,” Hamilton said.

Airbus, a European manufacturer,  is currently the largest airplane maker competing with Boeing. Hamilton says there has been a tough rivalry between Boeing and Airbus since Airbus introduced its A320 plane in 1988.

“So this is a real horserace that Boeing is still behind,” says Hamilton. “But Boeing is going to be catching up and as we go forward, I think you’ll see roughly about a 50/50 market share split,”  says Hamilton.

Gaining higher ground in the international market

“We’ve been expecting major orders coming out of the developing world,” says Joseph Schwieterman, an aviation expert at DePaul University.   

Schwieterman says the deal made with Lion Air gives Boeing an advantage internationally. “No doubt this sell is probably the beginning of additional sells from the Asian market, which is very strong right now,” he says.

He acknowledges that competitor Airbus has been trying to push its products into the international market, “but the fact that Boeing has had a couple of victories in a row here means there is something about Boeing that just works for international markets.”

Schwieterman says the 737 MAX model is perfect for the Asian market because the need is for shorter trips and the ability to turn aircrafts around for high productivity.

Boeing’s737 MAX has gathered more than 1,000 airplane orders and commitments from 15 customers. Boeing is expected to deliver the planes in 2017.