Lion Air Upgrades

Oct 27th, 2006, in Business & Economy, by

American and European banking syndicates are taking an interest in Lion Air.

The purchase of sixty Boeing 737-900 ER’s, which cost boeing about $75 million each, will be financed in large part by a number of European and American banks to the tune of 29.6 trillion rupiah, or about $3 billion, or 80% of the total funds needed. The remaining fifth, or 3.7 trillion rupiah, will be shouldered by Lion Air itself, a budget carrier properly called PT Lion Mentari Airlines.

Boeing 737 900
Boeing 737 900 in action.

Lion Air’s CEO, Rusdi Kirana, says tempo that the number of investors interested in taking part in the funding was more than five, however, he was reluctant to name any of them, saying that the deal would not be finalised until the end of the year. Those banks which would be chosen, he said, not surprisingly, were those which offered low interest rates which would not “penalise” the company.

The sixty planes will be bought in stages between April 2007 and 2010, and will go to help Lion Air, whose slogan is, somewhat oddly, “We Make People Fly”, replace its existing, sometimes accident prone, fleet of McDonnell Douglas MD-82’s and Boeing 737 400’s, both types of which are on average 17 years old. The Boeing 737-900ER type, a new model, can carry up to 215 passengers in a single-class layout.

Lion Air
Lion Air

Lion flies to about twenty-five domestic cities and towns, as well as to the international destinations of Kuala Lumpur, Penang, and Singapore. With the new planes it is planned that new routes will opened up, to Beijing, Shanghai and Guangzhou in China, Madras, Chennai and Bombay in India, and Bangkok in Thailand, starting in April next year. antara

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