Lion Air may cancel plane orders as spat with Boeing worsens
PARIS/JAKARTA: Indonesia’s Lion Air is reviewing airplane purchases from Boeing Co and has not ruled out cancelling orders as relations worsen in a spat over responsibility for a 737 jetliner crash that killed 189 people in late October, said sources.
Group co-founder Rusdi Kirana was furious over what he saw as attempts by Boeing to deflect attention from recent design changes and blame Lion Air for the crash, while the airline faced scrutiny over its maintenance record and pilots’ actions, said the people.
Rusdi is examining the possibility of cancelling remaining orders of Boeing jets “from the next delivery”, according to one of the sources.
Rusdi, a former group chief executive officer who now serves as Indonesia’s ambassador to Malaysia, remains closely involved with Lion Air and hosts a monthly meeting in Kuala Lumpur with the heads of the group’s airlines based in Indonesia, Malaysia and Thailand, according to an industry source.
No final decision been made by Lion Air, but discussion over the fate of US$22 billion (RM91.25 billion) of remaining orders highlights the stakes surrounding a probe involving the 737 MAX, which entered service last year.
Lion Air has 190 Boeing jets worth US$22 billion at list prices waiting to be delivered, on top of 197 already taken, making it one of the largest United States export customers. Any request to cancel could be designed to put pressure on Boeing and may require lengthy negotiations.
Rusdi, who co-founded the airline with his brother in 2000, ordered the review of airline purchases in response to Boeing’s statement last week focusing attention on piloting and maintenance topics, said the source.
It is not the first time an airline has crossed swords with its supplier after a crash.
Lion Air’s rival AirAsia Group Bhd clashed with Airbus SE after its Indonesian subsidiary lost an A320 in 2014. It continued to take deliveries, but relations never fully recovered and it later toyed with buying 787s from Boeing.