Indonesia’s Garuda says to cancel 49-jet Boeing 737 deal after crashes

JAKARTA (AFP) - Indonesia’s national carrier Garuda has told Boeing it will cancel a multi-billion-dollar order for 49 Boeing 737 Max 8 jets after the model was involved in two fatal crashes.

The move could spark more cancellations from other major carriers, an aviation analyst said, as Boeing and US federal regulators get set to face their first public grilling by Congress since the deadly incidents.

“We have sent a letter to Boeing requesting that the order be cancelled,” Garuda spokesman Ikhsan Rosan said.

“The reason is that Garuda passengers in Indonesia have lost trust and no longer have the confidence” in the plane, he said, adding that the airline was awaiting a response from Boeing.Boeing officials will visit Indonesia next week to discuss Garuda’s plans to call off the order, he told AFP.

Garuda had already received one of the planes, Rosan said, part of a 50-aircraft order worth US$4.9 billion at list prices when it was announced 
in 2014.

Garuda is also talking to Boeing about whether or not to return the plane it has in its fleet, the spokesman said.

The Indonesian carrier had so far paid Boeing about US $26 million, while the company’s head told local media outlet Detik that it would consider switching to a new version of the single-aisle jet.

“In principle, it’s not that we want to replace Boeing, but maybe we will replace (these planes) with another model,” Garuda Indonesia director I Gusti Ngurah Askhara Danadiputra told Detik.

A Boeing spokeswoman in Singapore told AFP yesterday “We do not comment on customer discussions.”

Shukor Yusof, head of Malaysia-based aviation consultancy Endau Analytics, said Garuda’s announcement appeared to mark the first formal plans by a carrier to cancel an order for the 737 MAX 8.

It “will probably not be the last. There is a risk that Garuda’s rival Lion Air, which also has many 737 MAX 8 orders, might make the same decision,” he said.