Indonesia's Lion Air confirms $6.2 billion deal for Boeing 737s, flags 787 jet order

JAKARTA (Reuters) - Indonesia's Lion Air Group announced on Tuesday a firm order to buy 50 Boeing Co BA.N 737 MAX 10 narrowbody jets worth $6.24 billion and said it plans to place a provisional order for Boeing 787 widebody jets in the next few weeks.

A Boeing 737 Max takes part in a flying display during the 52nd Paris Air Show at Le Bourget Airport near Paris, France June 22, 2017. REUTERS/Pascal Rossignol

Lion Air, which already has offshoots in Malaysia and Thailand, also plans to establish a new airline in a Southeast Asian country this year, co-founder Rusdi Kirana told reporters.

He declined to elaborate on the number of 787s to be ordered or in which country the new airline would be established.

A memorandum of understanding (MoU) for the purchase of 787s would be announced in “two to three weeks”, he said.

His comments came after the privately owned company earlier in the day confirmed the purchase of the 50 Boeing 737 MAX 10 jets by announcing a firm order. The jets are worth $6.24 billion at list prices, but airlines usually get discounts for bulk purchases.

The rapidly expanding carrier had in June 2017 placed a provisional order for the jets, the newest and largest member of the Boeing narrowbody family.

Kirana said the Indonesian government’s infrastructure expansion, which included airports, was fuelling Lion’s demand for more aircraft.

The airline's fleet is comprised primarily of narrowbodies, although it has three Airbus SE AIR.PA A330 widebodies. Kirana did not say what routes the 787s would be used on.

Boeing Senior Vice President Asia Pacific and India Sales Dinesh Keskar said the Boeing 737 MAX 10 was due to be certified by regulators in 2020, with Lion Air expected to receive its first jets of the type soon after.

Boeing said it had been listing this deal as from an unidentified customer in its order book before Lion Air’s confirmation.

Lion Air, one of Boeing’s largest customers, was the first airline globally to take delivery of the smaller Boeing 737 MAX 9 earlier this year.

In 2016, the Jakarta Post reported it was looking to set up a new airline with a local partner in Vietnam. Kirana declined to comment on whether that was the Southeast Asian market Lion Air was targeting for entry this year.

Reporting by Cindy Silviana and Bernadette Christina Munthe; Writing by Jamie Freed; Editing by Himani Sarkar and Muralikumar Anantharaman