Business

Lion Air may cancel Boeing jet orders over crash row

PARIS/JAKARTA: Indonesia's Lion Air is reviewing airplane purchases from Boeing and has not ruled out cancelling orders as relations worsen in a spat over responsibility for a 737 jetliner crash that killed 189 people in late October.

Co-founder Rusdi Kirana is furious over what he regards as attempts by Boeing to deflect attention from recent design changes and blame Lion Air for the crash, while the airline faces scrutiny over its maintenance record and pilots' actions.

Mr Kirana is examining the possibility of cancelling remaining orders of Boeing jets "from the next delivery", according to a person familiar with his thinking.

No final decision has been made, but discussion over the fate of US$22 billion (S$30 billion) of remaining orders highlights the stakes surrounding an investigation involving Boeing's fastest ever selling jet, the 737 MAX, which entered service last year.

Lion Air has 190 Boeing jets worth US$22 billion at list prices waiting to be delivered, on top of 197 already taken, making it one of the largest US export customers.

Any request to cancel could be designed to put pressure on Boeing and would likely trigger extensive negotiations.

Many airlines defer orders, but industry sources say aerospace suppliers rarely allow much scope for unilateral cancellations.

Lion Air declined to comment.

A Boeing spokesman said: "We are taking every measure to fully understand all aspects of this accident and are working closely with the investigating team and all regulatory authorities involved. We are also supporting our valued customer through this tough time." - REUTERS

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