Lion Group finalizes $5.5 billion LEAP-1A engine order
Left to right: Honorable Ambassador Joseph R. Donovan Jr, The Ambassador of United States of America to Indonesia; Mr. Chaker Chahrour, Vice President Global Sales and Marketing GE Aviation; His Excellency Budi Karya Sumadi, the Minister of Transportation of Republic of Indonesia; Mr. Edward Sirait, President Director Lion Air Group; Honorable Ambassador Rusdi Kirana, Ambassador of Republic of Indonesia to Malaysia and Founder of Lion Air Group
JAKARTA, Indonesia — 29 March 2018 — At a special signing ceremony here today, Transportation Partners, the leasing arm of Lion Group, and CFM International finalized an order for 380 LEAP-1A engines to power Airbus A320neo/A321neo aircraft. The final engine order, which is valued at $5.5 billion U.S. at list price was originally announced in February 2016, while the aircraft order was announced in March 2013.
"Lion Air Group is very pleased to partner with CFM International as part of our journey to strengthen our growth vision by adding LEAP and CFM56 engines to power our fleet," said Edward Sirait, president and chief executive officer of Lion Air Group. "CFM has been a great partner in supporting the growth of our fleet operation since the start of our journey.
"Our choice to use LEAP-1A engines to power our A320neo fleet and Boeing 737Max is the right decision," he continued. "The new fleet of A320neo and Boeing 737 Max are critical elements for our long-term growth that will ensure Lion Air Group's position as the leading airline in the region. We are optimistic that these engines will give us the highest efficiency and reliability to support Lion Air Group's growth in the region."
In addition to the LEAP-1A engines, Lion Group has also ordered 544 LEAP-1B engines to power its Boeing 737 MAX 8, MAX 9, and MAX 10 aircraft, of which 10 are currently in service with Lion Air. With a fleet of 924 LEAP engines in service or on order at a total value of $13.4 billion U.S. at list price, Lion Group is the largest LEAP engine customer in the world.
"This is a great new milestone for what has always been a great partnership," said Chaker Chahrour, vice president of Global Sales & Marketing for CFM parent company GE Aviation. "Lion Air has already seen the operational benefits of the LEAP-1B engine and understand what a great asset the LEAP-1A will be to its portfolio. Adding an expanded MRO aspect will take this relationship to a whole level. We are excited to see what the future brings."
Today's agreement also includes an extension of the 25-year Material Service Agreement (MSA) for CFM56-7B, CFM56-5B, and LEAP-1B engines originally signed in 2014 and expands its scope to include the LEAP-1A engine.
CFM will also provide MRO services to Lion Group's CFM56 and LEAP engines till their own shop, Batam Aero Technic (BAT) in Batam, Indonesia, is completed. CFM has been supporting the development of Lion Group's new engine maintenance and test cell facility since 2016, providing project management and expert advice starting from design, construction and commissioning for the new facility. When completed, BAT will have maintenance and overhaul capability for both CFM56 and LEAP engines. CFM will provide CFM56 and LEAP engine overhaul training with knowledge transfer that supports the development of highly-qualified local engine MRO specialists.
Lion Group, based in Jakarta, Indonesia, has been a CFM customer since the year 2000 and its entire single aisle narrow-body fleet, in service or on order, is powered by CFM engines. The airline group has ordered CFM56 engines to power its Airbus A320ceo and Boeing Next-Generation 737 aircraft, as well as LEAP-1A and LEAP-1B engines models for A320neo and 737 MAX aircraft, respectively.
About Transportation Partners and Lion Group. Transportation Partners was formed in 2012 and currently leases planes mainly to Lion Group airlines. The company, which focuses on large markets in China, Brazil, Japan and the United States, has continued to ramp up its third-party leasing business. Affiliate Company Lion Group has become Indonesia's leading domestic carrier and the country's largest privately-owned airline. Lion Group operates an extensive route network in Indonesia and also serves international destinations. In terms of domestic, Lion mainline and subsidiary Wings Air serve 76 destinations in Indonesia, giving the group the largest domestic network in the country. Lion Group mainline has 580 flights a day and Wings Air has 180 flights per day. Lion Group also operates in Malaysia (through its subsidiary Malindo) and Thailand (through its subsidiary Thai Lion).
About CFM International. LEAP engines are a product of CFM International, a 50/50 joint company between GE and Safran Aircraft Engines. CFM is the world's leading supplier of commercial aircraft engines and the company has delivered nearly 33,000 engines to date. The LEAP engine has become the preferred choice for next-generation single-aisle aircraft with more than 14,000 orders received through February 2018. For more information concerning CFM, visit us on the Web at www.cfmaeroengines.com or follow us on Twitter @CFM engines.