Indonesia's Lion Group eyes Bombardier order

The parent company of Indonesia's Lion Air said Wednesday it hopes to strike a deal for at least 50 Bombardier passenger jets next year, a purchase with a list price of more than $3 billion.

It would be the latest huge bet on Indonesia's booming aviation sector by Lion Group, which has in recent years struck two of the world's largest plane orders, worth $46 billion.

The company was hoping to complete the deal with Canadian manufacturer Bombardier for at least 50 new medium-range CS300 aircraft early next year, said Leithen Francis, head of public relations at Lion Group.

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"We are talking to Bombardier, we are considering the CS300, we do hope that negotiations do progress to where we can come to a decision by the first quarter," he told AFP.

"We would expect the deliveries of the aircraft to start in 2016."

He said the company was still deciding whether the planes would be allocated to its budget carrier Lion Air or its full-service airline Batik Air.

He would not put any potential price on the deal, but Dow Jones Newswires said each plane had a list price of $72 million.

That would make a deal for 50 of the planes worth $3.6 billion, although customers making big orders typically receive large discounts.

The new CS300, which is scheduled to start deliveries at the end of 2014, and its smaller sibling the CS100, is Bombardier's attempt to compete with smaller planes produced by Airbus and Boeing.

Lion Air was a little-known carrier until the two huge orders of recent years -- a $23.8 billion deal with European aerospace giant Airbus in March this year, and a $22.4 billion deal with Boeing in 2011.

However, experts have expressed fears that Lion Air's rapid expansion could compromise safety and there may not be enough trained pilots to keep up with growing demand.

Such concerns were only heightened in April when a Lion Air plane carrying 108 people went into the sea and split in two as it came in to land on the resort island of Bali.

Dozens of people were injured in the accident but there were no fatalities.

by Madeleine COOREY © 2013 AFP

Source: AFP
Date: Nov 6, 2013