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26 March, 2019

Garuda cancels order for 49 737 Max jets, while Virgin mulls options

Jakarta, Indonesia - June 13, 2016: Scenery Of Airplane Tail From Garuda Indonesia Airline Parked At Loading And Unloading Gate Of Jakarta Soekarno–Hatta International Airport Indonesia Southeast Asia

Garuda Indonesia has become the first carrier in the world to scrap its order of 737 Max jets, citing a lack of passenger trust following the Ethiopian Airlines and Lion Air crashes.

The company is cancelling its multi-billion dollar deal for 49 Boeing 737 Max aircraft, The Guardian reported, amid ongoing passenger distrust over two tragic disasters involving the jet.

The multibillion-dollar order was first announced in October 2014, with the promise of 50 737 Max aircraft. Garuda has so far only taken one of the aircraft and paid Boeing around $26 million, Agence France Presse (AFP) report.

Ikhsan Rosan, a spokesperson for Garuda Indonesia, told The Washington Post the decision to cancel the order was because of “consumers’ low confidence” in the aircraft following the crashes.

All but two of the 189 people who perished in the Lion Air-operated 737 Max crash near Jakarta in October were Indonesian nationals.

Rosan said airline officials told Boeing of the decision by letter, The Post report, and were scheduled to meet with representatives from Boeing to discuss the matter on 28 March.

Meanwhile, Virgin Australia is set to meet with Boeing regarding the safety of its 737 Max aircraft. A spokesperson for Virgin said the following:

“Virgin Australia will be sending two of its most senior flight operations team members to Seattle for an information session on the Boeing 737 MAX 8 aircraft…we look forward to hearing what Boeing has to say.

“We remain firm in our position that we won’t receive any new aircraft into our fleet until we are completely satisfied with their safety.”

Virgin Australia does not currently have any Boeing 737 Max 8 aircraft in its fleet.

“We are closely monitoring the situation and will continue to work with Boeing, CASA, and other relevant authorities as more information becomes available,” a spokesperson for Virgin Australia said.

Garuda’s request for cancellation comes amid Boeing’s promise of enhanced warning systems as standard in 737 Max jets. Prior to the Ethiopian Airlines disaster, certain safety features were sold optionally by Boeing.

Late last week, The New York Times alleged that many low-cost carriers, including Lion Air, opted not to buy these extra safety features, while regulators did not require them for certification.

Both aircraft in the Ethiopian Airlines and Lion Air crashes, which resulted in the loss of 346 lives, lacked these optional safety features.

Boeing shares have fallen by 12 per cent, wiping $28bn off its market value since the Ethiopian crash on 10 March. The company is further facing a criminal investigation by US Department of Transportation agents, which now involves the FBI, the Seattle Times report.

The federal grand jury investigation, based in Washington, D.C., is looking into the certification process that approved the safety of the new Boeing plane.

Investigations into the crash and the recent Ethiopian Airlines disaster are ongoing, however, regulators – including the Ethiopian transport minister – have already noted clear similarities between the two crashes.

Garuda Indonesia’s director, I Gusti Ngurah Askhara Danadiputra, told Indonesian media outlet Detik that it would consider switching to a new version of the jet.

“In principle, it’s not that we want to replace Boeing, but maybe we will replace [these planes] with another model,” Danadiputra said.

The Guardian also reported Lion Air is considering scrapping its own 737 Max order.

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american airlines Boeing 737 Max Ethiopian Airlines garuda indonesia Lion Air