It’s official: Lion Air revealed as a MAX customer; ACG announces MAX and NG

Update, 1:45pm: Aviation Capital Group announced a commitment for 35 MAXes and a firm order for 20 737-800NGs. ACG becomes the first lessor to commit to the MAX.

ACG announced a firm order for 30 Neos at the Dubai Air Show.

Update, 7:30 AM PST: Boeing says the signing will be for a “commitment” to the MAX. The photo shows it to be the 737-9.

Original Post:

It’s now official: Lion Air has been revealed it is a customer of the Boeing 737 MAX, joining American Airlines as the only two of nine disclosed customers.

We previously identified Lion Air as one of the original five airlines to announce commitments.

The revelation was made in connection with President Obama’s trip to Indonesia.

The type of MAX was not identified, but with a list price of of $21.7bn ($94m per unit), this suggests the planes could be the 737-9, the priciest of the 737 line.  There is a 201/29 split for MAX and -900ERs. Options for 150 have also been revealed.

Lion Air is the largest customer for the 737-900ER.

The news article described the deal as an “order.” A signing ceremony is planned for November 18 Indonesia time, so we’ll see if the commitment has been converted to a firm order. If so, it would be the first.

42 Comments on “It’s official: Lion Air revealed as a MAX customer; ACG announces MAX and NG

      • Uwe, you could be right about Obama.

        But why do you insist on knowing all the details about a Boeing B-737MAX contract when I have not seen you ever ask about the detains of all those Airbus A-320NEO contracts?

  1. JT was one of the airlines I had suspected to have ordered the MAX. So they will be the launch customer for the B-737-9MAX? Weren’t they also the launch customer for the current B-737-900ER? IIRC they have more than 100 of that model in service or still on order. So, JT becomes the second known airline to have ordered the MAX, behind AA. I suspect FR is another MAX customer, but maybe they are the launch customer for the B-737-8MAX model? I just don’t think they will be able to make a deal for the C-919 or MS-21 airplanes. Airbus doesn’t really want to talk to them, according to John Leahy, so it will be back to Boeing for new airplane deliveries after about 2014.

  2. Thank you, I thought the number of B-739s at JT was higher than 55. But wasn’t the order for them something like 115, or so? I had said;

    “So they will be the launch customer for the B-737-9MAX? Weren’t they also the launch customer for the current B-737-900ER? IIRC they have more than 100 of that model in service or still on order.”

  3. It is an astonishing order, even for region that’s going all guns. Especially as Lion Air appears to be a badly run airline (very poor consumer reports; blacklisted by the EU on safety grounds).

    • According to wikipedia, ALL Indonesian airlines are blacklisted. So the poor consumer reports could reflect a badly run industry instead of a single carrier.

  4. KDX125 noted in the “More on Max, Aspire Aviation…” post that , “Boeing’s Albaugh is on record saying that Boeing is not taking firm orders because they are neither able to provide performance guarantees nor has pricing been fixed.”

    If that quote is accurate and the descripiton that this is an order is correct, I guess this means that Boeing will be whipping out another few orders in short order now.

    I wonder how many orders they will have by year’s end.

  5. KC135TopBoom :
    Uwe, you could be right about Obama.
    But why do you insist on knowing all the details about a Boeing B-737MAX contract when I have not seen you ever ask about the detains of all those Airbus A-320NEO contracts?

    Because they can’t believe it and dont’ want to believe it. Its really as simple as that.

    • Details, man , details!

      The NEO was not wanted by those that had their fingers in the 737 pudding.
      OK, understandable. This resistance folded when Airbus didn’t retreat.

      The MAX was not wanted by any customer as told by Boeing not long ago.

      The NEO was reasonably defined at first offer while the MAX is still a thin vapor trail
      ( at least in the public domain ).

      Asking for more definition IMHO is a valid request here.

      • If you think that the MAX is “thin vapor trail” (even in the public domain) then you haven’t read enough.

        Boeing has publicly stated what they plan on doing with the B737MAX.

        How about you start doing some research first. Google, Leehamnews, flightglobal, etc. are good places to start.

  6. It is possible that the order would contain such a wide and flexible range of performance guarantees as well as some performance based pricing so as to enable an enforceable contract to be executed.

    If the parties agree to a formula that can be met and serves as a basis for mutual understanding, then a contract can result.

    This certainly sounds unusual based on previous statements made by Boeing, but never underestimate what Lawyers and Diplomats ( and Presidents) can accomplish when the incentives are sufficient.

    • It has been confirmed that LION AIR is signing a COMMITTMENT and not a firm Order. I, for one, wonder whether this committment contains any binding qualities or even penalties or even any earnest money deposit.

      I thought a Contract was achieved and thought that doable. Apparently not despite the President, Diplomats and Lawyers.

      Can anyone clarify what a “committment” is except some formal language to say that “we are considering buying this future product” Are there any terms that bind the parties? At best it seems to be a promise that a promise to commit will be considered in the future .

      Perhaps its significance is that it is saying it will not consider the Airbus competitive models.

  7. Jacobin777 :
    How about you start doing some research first. Google, Leehamnews, flightglobal, etc. are good places to start.

    You’re a dear!
    That is exactly the result I got from “researching first” as you so nicely put it.
    Boeing has let lose a barrage of addressable improvements that need quite a bit
    of condensation to form into a tangible product.

    A proposition: write an expose of MAX properties and send it to the proprietor.
    Mr Hamilton then could ( pretty please ) do a comparison post when the real MAX data is available.

  8. OK, now they have a fair number of firm oders so where and when is the MAX going to take shape?

  9. Good order for Boeing 737-900. May be this is take of time for this series 😉

    Good to finally have another name than AA for these 700 commitments to the 737Max. That must be about 500 if I am not wrong. Is Delta the other 200?

  10. “We previously identified Lion Air as one of the original five airlines to announce commitments.”

    Does this imply the order is included in the 700 commitments, or are we now looking at 900?

    Either way, a stunning order. It will be rather interesting to follow the developments in Indonesia throughout the decade… let’s hope the sandbox is big enough for all these new toys.

  11. …and the customers are lining up, not entirely unexpected 🙂 Certainly an interesting announcement. However this announcement of “… a commitment for the airline to order…” is not an order, it is a ‘commitment’. When Boeing settles on the design and spec and launches the programme then it will have hundreds of ‘orders’ hitting the books, until then it’s just PR. Arik Air also had a commitment to buy 748s and EK also committed to buy 60 A330s but then nothing happened…
    In fact this announcement is no different to the AA’s original announcement “American also intends to order 100 of Boeing’s expected new evolution of the 737NG…”. Now Boeing has to settle on the design.

  12. CBL, I believe AA signed up for 100 and with Lion Air’s 201 we’re at 301 – leaving some 400 from 7 undisclosed customers. I’d pencil in 3-4 lessors for another 250 total and Alaska for 50, plus another 3 airlines (perhaps including JAL) with smaller orders to split the remaining 100.

    • Lion airs is 201 ‘commitment’ + 150 options (?)
      AA was 100 ‘commitment’ (I remembered 150, my error)
      Hence my 500 figure was wrong.
      This is really hard to tally as none of the ‘commitment’ are official.

      Time for Boeing to publish contractual specs, officially offer the plane for sale and transform these ‘commitment’ into firm orders and options. 😉

      At the moment this is still a fantasy airplane. 🙁

    • They all want to grow to each fit the opportunity.

      Lets reformulate: What will be the supply/demand relation in the region?
      In the middle range ( slight oversupply ). it will be very interesting to watch
      who will fall by the wayside. But my guess is the fallout will not be based
      on fleet technical merits but more on political games. The US is very keen
      on having a political imprint on the region. We currently see the mechanics
      working in Indian defense procurement.

    • Indonesia has a large population spread over several islands. It’s ripe for a big aviation expansion. Lion Air, as the most ambitious of Indonesian airlines, certainly wants to acquire lots more aircraft to take advantage of this expansion. The problem, I suggest above, is that Lion Air is woefully mismanaged and is struggling to provide a proper and safe service with the 70 or so aircraft it has already got. Unlike other airlines that have gone through or are planning expansion on a similar scale – Ryanair, Emirates, AirAsia – which are very well managed. We have to hope Lion Air sorts itself out before it takes on many more aircraft.

      In addition to the 230 new orders, Lion Air is due more than one hundred deliveries of 737s from a previous order.

    • Leaving aside Lion Air’s management issues, I suspect a well run Indonesian airline could easily accommodate 100 new planes in the next ten years, in which case a follow on order would be needed. 230 planes sounds a lot. But if Lion Air can negotiate a good deal as an early and enthusiastic adopter of the 737 MAX, the deal could work for them. I would want to avoid a substantial upfront fee or penalty in taking less than ordered amount.

    • Sorry to buy up this thread. One other titbit. Lion Air had to switch 737-900s to 800s for near term delivery because they couldn’t get finance for their 900s. The 800s have a readier remarket if Lion Air go belly up. Finance will be key to this new order.

  13. All this talk about commitments is funny in a sad and ironic manner. Ir emember reading a blast from fleetbuzzeditorial last year (before they got all sensitive and made it a mostly “protected” article fan club site) concerning this exact wordplay about orders, commitments and Letters of Intentions etc. They were castigating Airbus over some order that was apparently not an order. Some of the readers and commenters here must certainly be aware of this.

    I wonder what they make of all of these committed non-orders now.

    I see it as one of two things:
    1. Boeing is playing it straight and they really do not want to sign contractually binding orders until they get their specs mature enough and in order.

    2. Nobody wants to “commit” themselves to an order yet as Boeings specs are not mature enough.

    Okay a third opton is somewher between the other two.

    By the way, a very good question Tim Raetzloff.

  14. The Lion air “commitment” is setting the cat among the pigeons-in terms of reaction from both camps -if we look at it objectively, here is my take: Now it is B’s turn to rope in commitments/ expressing interest and so on, on the way to serious ordering, now that they have a reengined proposition, however undefined it is , interms of specs. A had its day and continues to do well on Neo.Like wise at roughly fifty/fifty basis, B will also rake in the orders , whether the A fanboys like it or not.
    Second why this Lion air commitment now-it must be more due to politics rather than the seller and potential buyer.Politicians would love to “announce” major deals visiting other countries.That could the reason why this spilled out in the market place.
    B has work to do, freeze specs, make performance commitments and translate these expression of interest (if I may) into orders. They will by and large.
    One more thing about Lion Air’s ability to take such large nos-it is true that both A and B have such customers who order seemingly huge nos ;in fact to be honest, A has more of such customers than B in my view.
    This sequential game continues and so does the duopoly in the narrow body-showing the market power of two entrenched powerful players, splitting it nicely in the middle,both doing a reengine and investing in the wide body programs for the rest of the decade.Right now, A must be happy to have seen off B from a new (NB) plane and B is relieved to have time and resources to look at defending the widebody market.

  15. Smart people at Lion Air in Indonesia, the country of my birth, to be the
    launching airline for the 737-900 AND be among the first airlines to commit
    to the 737MAX AND ordering in the hundreds of units!
    No wonder really, Indonesia, is the largest Moslem Democracy in the
    world, with 300+ million people spread out over 16+ thousand islands
    along the equator, containing virtually unlimited quantities of oil, timber,
    bauxite and many other minerals!

    When Airbus launched the A321 in 1991, after I retired, I wrote Boeing a
    letter, urging them to stretch the 737 once more beyond the size of the
    -800, to be able to compete effectively with the A321.
    The official reply I obtained, indicated that it could NOT BE DONE, with-
    out installing a taller landing gear, to clear the tail during T.O., which would
    be too expensive! The latter part only, with which I agreed.

    It wasn’t until 2006, FIFTEEN YEARS LATER, when Lion Air launched the
    and the rest is history!

  16. Rudy, Indonesia has 230m people, and is an oil importer (hence the trillions of rupiah spent subsidising Pertamina). But it is a growing economy and aviation market with plenty of room for expansion.

  17. George D
    I believe your figures are outdated my friend!
    The Indonesian population has gone a lot and Pertamina has been shut down,
    ever since the new President was democratically elected and reelected for a
    second term!
    What I believe is much more important, is the fact that Indonesia is one of the
    wealthiest nations in the world, in terms of untapped mineral resources and yes,
    there still is a lot of corruption, but it is being tackled strongly and in decline!

    What’s more, I am very happy that Boeing and NOT Airbus has such a strong
    foothold in a country with one of the greatest growth potential for air-travel in the
    whole world, because of it’s 16,000 island and 3,000+ mile-wide archipelago.
    Lion Air was not only the launching customer for the 737-900, but also the 737
    MAX, with several hundred units in service and or on order!

    My question continues to be, why did it take Boeing 16 years to launch the
    737-900, AFTER the equivalent Airbus A321 was launched in 1991, both models
    now being in great demand because of their extremely low seat-mile cost?

  18. Form the CIA World Fact Book…

    245,613,043 (July 2011 est.)

    In the Intelligence community this is a “go to” source for mundane info…

    Please don’t turn this into another Euro vs USA issue…. Rgds

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