NUSA DUA, Indonesia: US President Barack Obama Friday claimed a share of the credit as Boeing sealed its largest-ever commercial aircraft order to build 230 jets worth $21.7 billion for Indonesia’s Lion Air.
The deal, for 201 737 MAXs and 29 737-900 ERs, bolstered Obama’s strategic decision to orient the struggling US economy with booming markets in emerging Asia, which he sees as an engine of US jobs growth for years to come.
Obama officiated at the signing of papers sealing the deal between Boeing and Lion Air, a low-cost regional carrier, before plunging into a day of diplomacy with Southeast Asian leaders on the last leg of a Pacific tour.
“The US administration and the (Export-Import Bank) in particular were critical in facilitating this deal,” Obama said, saying such commercial successes were critical to his goal of doubling US exports to speed recovery.
“I want to congratulate Boeing for making outstanding planes, including the one I fly on,” Obama said, referring to his iconic presidential 747, at the ceremony on the Indonesian island of Bali attended by top US officials and Lion Air executives.
The president is in town for a Southeast Asian summit as well as Saturday’s wider East Asia Summit which he sees as the cornerstone of security engagement with a region where China’s rise is provoking searching strategic questions.
Boeing earlier said in a statement that the Lion Air deal would be “the largest commercial airplane order ever in Boeing’s history by both dollar volume and total number of airplanes.” By the face value, it would also be the largest any aircraft maker has received.
The agreement, which will unfold over many years, also includes the option to order another 150 aircraft, which could put the eventual value at $35 billion.
Boeing spokesman Wilson Chow said the sale underscores the strength of the aviation market in the fast-growing Asia-Pacific region.
“According to our outlook, Asia-Pacific is one of our fastest growing markets areas... We’re expecting a seven per cent growth of traffic per year for the next 20 years,” he told AFP.
He declined to give a timeframe for delivery of the aircraft, but noted that the 737 MAX will only be ready for delivery in 2017.
Craig West from Britain-based Airliner World magazine said he suspected the deal was a generational affair.
“This could be over a very long period of time, so that when the last batch begins to be delivered, the first batch are already so old that they are put out of service,” he told AFP.
The White House, anxious to tout US successes amid 9.0 per cent unemployment as Obama launches his 2012 reelection bid, said the deal would support 110,000 American jobs at Boeing and at suppliers throughout 43 American states.
Officials did not say that the pact would create new jobs, but highlighted other deals, some already announced, including the sale of eight Boeing 777-300ER jets to Singapore Airlines worth $2.4 billion.
Indonesia’s Garuda Airlines meanwhile has signed a contract to buy 50 CFM56 General Electric engines worth $1.3 billion, the White House said.
And Sikorsky will sell Brunei 12 Blackhawk S-70i helicopters worth $325 million, the White House said, adding that the total value of all the deals was $25 billion.
The Lion Air deal topped this week’s previous record Boeing order. The Chicago-based aircraft maker kicked off the Dubai Airshow with the announcement of an order from Emirates airline for 50 Boeing long-range 777-300ERs worth $18 billion at list price.
At the same show Boeing also sealed a deal with Qatar Airways for two 777 freighters for $560 million.
The Lion Air deal was likely a major victory for Boeing over European rival Airbus.
Aviation Week reported earlier this month that Lion Air had been weighing the US-made 737s against the Airbus 320.
A leading domestic and regional airline but little known internationally, Lion Air is Indonesia’s largest private carrier, owned by brothers Kusnan and Rusdi Kirana.
In 2007, Lion Air was among several Indonesian airlines banned by the European Union for lax safety standards.
The ban on flag carrier Garuda Indonesia and several other carriers was lifted in July 2009, but Lion Air still remains on the blacklist.