3D imagery, 737 MAX, MAX, 737 MAX 7, 737 MAX8, 737 MAX 9

PARIS – Indonesian ultra low-cost carrier (ULCC), Lion Air Group, announced a commitment for 50 new Boeing 737 MAX 10 jets at the Paris Air Show Monday, capping a frenetic day of orders and commitments for the newest and largest member of Boeing’s re-engined 737 MAX family.

Lion Air was the launch customer for the 737 MAX 8 via its Malaysian subsidiary Malindo Air and was already the single largest customer for the 737 MAX, with 201 frames on order. The additional 737 MAX frames bring its order to 251 frames in all, and Lion Air will now potentially be a launch customer for each of the 737 MAX 8, 737 MAX 9, and 737 MAX 10.

“The 737 MAX family of airplanes is the perfect combination of single-aisle aircraft for the Lion Air Group, with their new level fuel-efficiency as well as range and capacity capabilities,” said Lion Air Group President Edward Sirait. “The Lion Air Group was first in the world to put the 737 MAX 8 into service and the first to order the 737 MAX 9, and we continue to lead the way again with this commitment for 50 737 MAX 10s and help launch the latest version of the 737.”

“Boeing is honored that the 737 family of airplanes continues to play an integral role in the Lion Air Group’s fleet and growth strategy,” added Boeing Commercial Airplanes President and CEO Kevin McAllister. “This commitment is a testament to the capabilities of the 737 MAX family of airplanes and we look forward to delivering both the 737 MAX 9 and MAX 10 to them in the coming years.”

Lion Air bets on more growth and MAX 10 for capacity-constrained Jakarta hub

With the additional 50 737 MAX jets, Lion Air now has more than 428 orders for next-generation narrowbody aircraft consisting of 178 A320neo family aircraft for full-service subsidiary Batik Air, and 250 MAX jets for low-cost arms Lion Air, Thai Lion Air, and Malindo Air.

This compares to an existing narrowbody fleet of 211 aircraft (179 737NG and 32 A320ceo family planes) plus 67 ATR 72 turboprops flying regional routes (51 with Wings Air in Indonesia, 16 with Malindo Air) and three widebody Airbus A330-300s.

It also has orders for 11 more ATR 72s and 58 current generation narrowbodies (50 737NGs and 8 A320ceos). So in all, Lion Air group operates 281 planes and has 497 aircraft on order.

This is an aggressive growth plan to be sure, but it isn’t the most aggressive in Asia by any means. As compared to peer airlines, rival Southeast Asian ULCC, AirAsia, has an active fleet of 226 frames against orders for 448 frames, while Indian ULCC, IndiGo, has 459 aircraft on order against an active fleet of just 135 frames. Lion Air’s growth plans are aggressive but not crazy.

Lion Air’s largest hub at Jakarta’s Soekarno-Hatta International Airport will be a particularly strong market for the 737 MAX 10, as capacity at the airport is heavily constrained by insufficient terminal and runway infrastructure.

In fact, at present, Jakarta is already over its capacity serving 58.7 million passengers in 2016 (growth of 8.1% year-over-year versus 2015) against a capacity of 52 million passengers.

That figure is, however, lower than the 2013 peak of 60.1 million passengers. A new fourth terminal and third runway are currently under construction, but until they are built, Jakarta simply doesn’t have much room to grow.

And with projected traffic growth over the next decade, the airport will once again be over capacity for aircraft movements by the early 2020s, which makes the 737 MAX 10 the perfect tool for Lion Air to serve high density domestic and regional routes.