Loss Of Passenger Confidence – Indonesia Airline Set To Cancel $6.9 Billion Boeing 737 Deal


It is the first announcement of a cancellation since Boeing’s new model aircraft was grounded by airlines worldwide after the devastating crashes in Indonesia and Ethiopia.

Garuda Indonesia, which had ordered 50 Max 8 jets in 2014 and received just one plane last year, sent a letter to Boeing last week requesting to cancel the order worth $US4.9 billion ($6.9 billion), the company’s spokesman Ikhsan Rosan said.

The carrier has so far paid Boeing about $US26 million for the order.

Garuda joined other airlines worldwide in grounding its one Max 8 jet after the crash of an Ethiopian Airlines flight this month that killed all 157 people aboard.

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That crash came less than five months after 189 people died when another Max 8 plane, operated by Indonesian private carrier Lion Air, crashed into the Java Sea after taking off from Jakarta.

“Passengers always ask what type of plane they will fly as they have lost trust and confidence in the Max 8 jet,” Mr Rosan said. “This would harm our business.”

He said that Garuda plans to meet with Boeing representatives next week in Jakarta to discuss details of cancelling the order.

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“We don’t want to use Max jets … but maybe will consider switching it with another Boeing model of plane,” Mr Rosan said.

He said Indonesian passengers are afraid to take flights using any Max model, whether it’s 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 29 crash.

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Officials have provided scant details since then, saying they are still analyzing data from a cockpit voice recorder that was only recovered from the sea in January.

However, Ethiopian transport officials have said that analysis of the Ethiopian Airlines black boxed show “clear similarities” to the Indonesian crash.


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