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Indonesia's Garuda first airline to cancel $6 bn 737 MAX order post crash

Garuda is the first airline to publicly confirm plans to cancel an order for the troubled jets

Reuters  |  Jakarta 

Boeing 737 MAX
Boeing 737 MAX

National carrier Garuda Indonesia has sent a letter to Co asking to cancel an order for 49 737 MAX 8 narrowbody jets, Garuda Chief Financial Officer Fuad Rizal said on Friday.

The airline could switch the order, valued at $6 billion at list prices, to other models, Rizal told Reuters. He said negotiations with were ongoing and Airbus SE jets were not under consideration.

Garuda is the first airline to publicly confirm plans to cancel an order for the troubled jets after the second crash of a 737 MAX 8, which killed 157 people in Ethiopia last week.

Indonesian rival Lion Air has been reconsidering its orders since one of its 737 MAX jets crashed in October.

Garuda CEO Ari Askhara told Reuters on Friday that customers had lost trust in the 737 MAX 8.

The airline has only one in its fleet at present.

"They have been relooking at their fleet plan anyway so this is an opportunity to make some changes that otherwise may be difficult to do," CAPA Centre for Aviation Chief Analyst Brendan Sobie said.

Askhara said last week it was possible it would cancel the order for 20 of the jets, with a final decision depending on what the U.S. Federal Aviation Administration does after the Ethiopian crash.

He told Reuters before the crash that the airline had decided to reduce the Boeing 737 MAX order from 49 by swapping some to widebody Boeing models.

Boeing declined to comment on customer discussions.

 

First Published: Fri, March 22 2019. 11:17 IST
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