Cancellation request adds to Boeing’s woes
In a blow for Boeing, Indonesia’s flag carrier is seeking the cancellation of a multibillion-dollar order for 49 of the planemaker’s 737 Max 8 jets, citing a loss of confidence after two crashes within five months.
It is the first announcement of a cancellation since Boeing’s new model aircraft were grounded after fatal crashes in Indonesia and Ethiopia.
Garuda Indonesia, which ordered 50 Max 8 jets in 2014 and had received just one plane last year, sent a letter to Boeing last week asking to cancel the US$4.9 billion order, company spokesman Ikhsan Rosan said yesterday. The carrier has so far paid Boeing about US$26 million for the order.
Garuda joined other airlines worldwide in grounding its sole Max 8 jet after the crash of an Ethiopian Airlines flight this month, which killed all 157 people aboard. It came less than five months after 189 people died in the October 29 crash of another Max 8, operated by Indonesian private carrier Lion Air.
‘‘Passengers always ask what type of plane they will fly, as they have lost trust and confidence in the Max 8 jet,’’ Rosan said. ‘‘This would harm our business.’’
He said Garuda planned to meet Boeing representatives next week in Jakarta to discuss details of cancelling the order.
‘‘We don’t want to use Max jets . . . but maybe will consider switching it with another Boeing model of plane.’’
Rosan said Indonesian passengers were afraid to take flights using any Max model, whether it was the 8, 9 or 10 series.
A preliminary report from Indonesia’s National Transportation Safety Committee in December stopped short of declaring a probable cause of the October crash. Officials have provided scant details since then, saying they are still analysing data from a cockpit voice recorder that was only recovered from the sea in January.
Meanwhile, Polish national carrier LOT said it was considering asking for financial compensation from Boeing or even a delay to deliveries of purchased 737 Max 8 aircraft after the planes were grounded globally following the crash in Ethiopia. LOT has five 737 Max 8 planes and is to receive nine more this year.
Another Polish carrier, charter airline EnterAir, said it would also seek damages. It has two Max 8 planes and has placed orders for another four.
Earlier this month, Norwegian Air Shuttles said it would seek compensation from Boeing. It has grounded its 18 737 Max 8 aircraft.
With Boeing’s backlog of 4600 unfilled orders for Max jets, the loss of the Garuda order may have little financial impact on the company. The danger is that other airlines could follow suit, particularly if investigators fault the plane for the accidents in Indonesia and Ethiopia.