The Boeing Co. announced a record-breaking deal Thursday as it amassed customers and commitments for its re-engined 737 Max.
Boeing signed an agreement with Jakarta-based Lion Air, which committed to buy 201 of Boeing’s 737 Max aircraft and 29 737-900 extended range jets. The deal is valued at $21.7 billion at list prices, though airlines rarely pay full price.
Lion Air’s request is both Boeing’s largest in terms of the number of airplanes and its biggest by dollar value, Boeing said. The Lion Air order tops the dollar value of one announced earlier this week from Emirates. The airline ordered 50 777s in a deal valued at $18 billion.
Boeing said Lion Air also took out options for an additional 150 airplanes.
“This order is a big deal,” RBC Capital Markets analyst Robert Stallard wrote in a research note to clients. The deal “gives a meaningful boost to Boeing’s backlog.”
Boeing launched its re-engined 737 in August, saying it had commitments for 496 aircraft. Even before Boeing’s board signed off on building the updated single-aisle 737 Max, American Airlines said it would take 100 aircraft. Over the past few months, Boeing officials have said interest in the 737 Max is growing. But no customers beside American had come forward publicly until Thursday. In addition to Lion, Aviation Capital Group — a California-based leasing company — said on Thursday it plans to order 35 Max jets. The leasing group also signed an order for 20 737-800s.
“These new 737NG and 737 Max airplanes will continue our long-standing strategy of providing our customers the most fuel-efficient, most capable airplanes with the lowest operating costs,” R. Stephen Hannahs, chief executive of Aviation Capital Group, said in a statement.
The Lion Air deal is not a certainty. The airline still has to complete the order, and it’s struggling. The Jakarta Post reported in August that Lion Air was ordered to ground 13 planes so it would have more in reserve because it had too many late flights.
Boeing introduced the 737 Max in answer to rival Airbus’ updated A320. In late 2010, Airbus announced its plan to re-engine its single-aisle challenger to the 737. The aircraft is called the A320 new engine option, or A320neo.
Both Boeing and Airbus have announced plans to ramp up production of their 737 and A320 jets to meet customer demand.
Chicago-based Boeing hasn’t said yet where it will build the 737 Max. The jet maker has built its existing 737s at its Renton factory for decades.
On Wednesday, consulting firm Accenture released a study examining possible 737 Max sites, finding that Renton has a good chance. The study was paid for by government, industry and labor groups in Washington state. Gov. Chris Gregoire called for $9.8 million to boost aerospace training and education in the state to win the 737 Max work.
The Associated Press contributed to this report.
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