Indonesia's Lion Air looks to be new 787 customer

Indonesia's Lion Air is close to signing a deal for 10 Boeing 787-8 Dreamliner passenger jets, with a total list price of USD$1.9 billion, as the budget carrier aims to tap the long-haul market.

Two sources involved in the deal told reporters that Lion Air prefers the newer carbon-composite 787 to the Airbus A330. The deal is expected to be signed in Jakarta on June 8 as Lion Air celebrates its 12th anniversary.

Such a move by Lion Air would put more pressure on Garuda Indonesia and Malaysia's AirAsia because it would be able to serve a broader range of destinations.

Lion Air's founder and chief executive Rusdi Kirana said in February the Indonesian low-cost carrier was in negotiations with Airbus and Boeing to buy Airbus A330s or Boeing 787s.

One of the sources said the 787 would help Lion Air's marketing campaign with an image of fuel efficiency and the latest technology.

"Dreamliner is a new design, it is based on the latest technology, while the A330 is basically an old (design)," said one of the sources, who declined to be identified because of the confidentiality of the talks.

If the financing terms from both manufacturers are equal, he said, Lion Air would choose the 787 over the A330.

A deal would mean Boeing had managed to keep Airbus away from its top customer. Lion Air recently signed a record order for USD$22.4 billion worth of Boeing 737 single aisle jets.

(Reuters)