By Siva Govindasamy
BATAM, Indonesia Jan 27 Indonesia's Lion Air
said on Monday it had purchased CFM International engines worth
$1.2 billion for 60 new Airbus A320s on order as the
budget carrier goes on a shopping spree to boost capacity in
The privately owned airline said it would start taking
delivery of its new A320 aircraft, with CFM 56-5B engines, in
the middle of this year, with a total of six planes due to be
delivered this year.
CFM is a joint venture between General Electric and
It also said in a statement that it had yet to decide on the
engines for its 174-strong fleet of upgraded A-320 aircraft it
has on order.
Lion Air wants to capitalise on Indonesia's rising consumer
class who are increasingly hopping between the myriad islands of
the world's fourth-most populous country, whilst it competes
internationally with the likes of AirAsia.
Faced with strong demand on its domestic routes, the airline
said was considering widebody aircraft from both Boeing and
Airbus for an for an order it plans to make in the first quarter
Lion Air said it planned to cancel an existing order for
five Boeing 787-8 aircraft, which can carry up to 350
passengers, as it wanted even bigger planes. In addition to the
order for larger aircraft, Lion Air plans to purchase smaller
Boeing 737 models to join a fleet that already includes a large
number of that model.
The announcement was made on the sidelines of Lion Air's
launch of its new maintenance, repair and overhaul hangar on the
Indonesia island of Batam near Singapore. This is the first of
four hangars that Lion plans to open on the island with the
others due to be completed by June.
"There are relatively few heavy maintenance facilities in
Indonesia, despite the fact that Indonesia is one of the largest
domestic aviation markets in the world," said Romdani Adali
Adang, the president director of Batam Aero Technic, which is
part of the Lion Group.
"Some airlines are sending their aircraft overseas for heavy
maintenance checks. But it costs money to ferry empty aircraft
overseas and doing heavy checks is very labour intensive work.
Therefore, it makes more sense for this work to be done in
Lion also plans to make Batam an international transit hub
for passengers flying in and out of Indonesia and its second
major Indonesia hub after Jakarta. The airline plans to increase
the number of domestic destinations it serves from Batam to 20
from the current 15 and increase the frequency of these
It then plans to launch services to points in southern China
like Guangzhou and Hong Kong, as well as Bangkok, Jeddah and the
Indian cities of New Delhi and Mumbai.
This will help passengers bypass the congested airport in
Jakarta, which is Indonesia's main international hub, said Rusdi
Kirana, the president director of Lion Group.
Indonesian airlines have been looking for alternatives to
Jakarta's Soekarno-Hatta Airport for several years due to the
congestion and delays that the airport faces.
"The distance is actually shorter if you transit in Batam
rather than flying south to Jakarta to transit," said Kirana.
"The shorter flying time makes flying more convenient for
passengers and it means aircraft burn less fuel, leading to
significant cost savings."