Export-Import Bank of the United States (Ex-Im Bank) approved (05-Mar-2013) a final commitment of USD1.1 billion to finance the export of a fleet of Boeing 737-900ER aircraft with CFM International engines to Lion Air. The aircraft will be delivered to the Indonesian carrier for operation by Malindo Airways (Malaysia) and Batik Air (Indonesia). The authorisation is a final commitment of a preliminary offer of financing that the Bank approved in 2011. Ex-Im Bank is providing a guarantee of financing provided by Apple Bank for Savings. Additional funding may be provided by capital-markets investors via an Ex-Im Bank-guaranteed bond. The financing will support a portion of Lion Air’s outstanding orders for 737-900ER aircraft, which includes 230 737 aircraft ordered in Nov-2011, the largest commercial aircraft order in aviation history. [more - original PR]
Ex-Im Bank approves USD1.1bn financing for 737-900ER aircraft to Lion Air
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Most of the growth in 2016 was at Lion Group’s two full service airlines, Indonesia’s Batik Air and Malaysia’s Malindo Air. Malindo expanded its fleet by a staggering 15 aircraft, for a total of 42, making it one of the fastest-growing airlines in the world. Batik expanded its fleet by eight aircraft in 2016, for a total of 41.
The rate of expansion slowed at all three of Lion Group’s low cost airlines – Lion Air, Thai Lion Air and the turboprop operator Wings Air. The fleet at the main Lion Air brand only expanded by three aircraft, while Wings added four turboprops. The group’s JV in Thailand added six aircraft, which was fewer aircraft than initially planned.
Lion Air Group begins international expansion from Indonesia with Batik Air Australia & India routes
The Lion Group is preparing to expand in Indonesia’s international market, with several new routes to Australia, India and East Asia. Lion is the domestic leader in Indonesia, its three Indonesian airline subsidiaries accounting for approximately half of total domestic capacity. However, the group has only a tiny presence in the Indonesian international market, having only five scheduled international destinations.
The full service subsidiary Batik Air has encountered delays in commencing operations to Australia and India but remains keen on serving both markets with multiple destinations. Meanwhile, its Malaysian affiliate Malindo Air is jump starting the group’s entrance in the Indonesia-Australia market with a new fifth freedom route from Bali to Brisbane, which will be launched on 31-Mar-2017.
International expansion is becoming strategically necessary for Lion as Indonesia’s international market is now growing faster than the much larger domestic market. AirAsia and Garuda have already been focusing more on international expansion, widening their lead over Lion in Indonesia’s international market.