Lion Air

Boeing wins $21.7bn airplane order from Lion Air

Boeing has won a $21.7 billion deal to supply 230 short-haul 737 jets to Indonesia’s largest domestic airline, Lion Air.

The sale, announced by the White House near the end of US President Barack Obama’s nine-day Pacific tour, is the largest commercial order in Boeing’s history. The sale is also a boost for Boeing’s efforts to develop a revamped version of its best-selling 737 to compete with a model produced by its European rival Airbus.

"This is an example of how we are going to achieve the long-term goals I set of doubling our exports over the next several years," Obama said after executives from Boeing and Lion Air signed a commitment for the jet orders.

The deal from Lion Air opens the door to orders for 29 Next-Generation 737-900 extended range planes and 201 of Boeing’s new 737 MAX, an updated version of its best-selling model.

The company said the 201 provisional orders for the 737 MAX were included in previously announced commitments for 700 of the planes, which are due to enter service in 2017 equipped with fuel-efficient engines.

Obama briefly struggled to get into the signing ceremony room because of a jammed door, telling his entourage "how embarrassing" once he managed to open it. Once inside, he described the plane deal as a "win-win" situation for consumers in the region and US workers and said his administration and the Ex-Im bank played a key role in facilitating the deal.

The Democrat is under intense pressure ahead of a re-election battle in 2012 to show progress in boosting the economy and bringing down the 9 per cent US unemployment rate. During his nine-day Asia-Pacific tour that began in Hawaii, Obama has sought to emphasize an agenda of expanding trade ties with Asia, the world's fastest growing region.

Boeing said the Lion Air order, when finalised, would be its largest ever "by both dollar volume and total number of airplanes". The plane maker said strong customer demand was driving its plans to raise production over the next three years.

"As a result of that increase, we will definitely be adding many more jobs," Boeing spokesman Doug Alder Jr. said, without giving a specific figure.

The White House said the agreement would support more than 110,000 jobs at Boeing and US suppliers.

Previewing other deals to be announced on the sidelines of an East Asia Summit on the Indonesian island of Bali, the White House said Boeing reached a $2.4 billion deal for Singapore Airlines to buy eight 777-300ER aircraft.

General Electric will also announce a deal to sell 50 engines to Indonesia's Garuda Airlines in an agreement worth $1.3 billion. And in a $325 million deal presented as one of the largest defence procurements in Brunei's history, United Technologies Corp unit Sikorsky will supply 12 Black Hawk helicopters to the Royal Brunei Armed Forces Support Helicopter Project.

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