Indonesia's flagship airline cancels $5 billion order for 49 Boeing 737 Max 8 jets after deadly crashes

Willy Kurniawan/Reuters

A Boeing 737 Max 8 belonging to Garuda at a maintenance facility at Indonesia's Soekarno-Hatta International airport on March 13, 2019. The airline formally canceled a $5 billion order of the model.

• Garuda, Indonesia's flagship airline, asked to cancel a $5 billion order for 49 Boeing 737 Max 8 jets in light of two deadly crashes involving the aircraft in five months.
• "Garuda passengers in Indonesia have lost trust and no longer have the confidence" in the plane, a spokesman for the airline told Agence France-Presse.
• This is the first time an airline has formally asked to cancel an order of the jet model.
• It's not clear whether Garuda will order a different Boeing model, or order from another manufacturer altogether.

Indonesia's flagship airline has asked to cancel a $5 billion order of 49 Boeing 737 Max 8 jets, saying it's customers had "lost trust" in the plane after two of them crashed within five months of each other.

Ikhsan Rosan, a spokesman for Garuda airline, told Agence France-Presse (AFP) on Friday: "We have sent a letter to Boeing requesting that the order be canceled."

"The reason is that Garuda passengers in Indonesia have lost trust and no longer have the confidence" in the model, Ikhsan added.

Boeing representatives plan to visit Jakarta next week to discuss the cancellation request with Garuda in person, CNN reported Ikhsan as saying.

Boeing did not immediately respond to a request for comment from Business Insider.

Read more: The crashed Lion Air and Ethiopian jets lacked safety features that could have helped because Boeing charged extra for them, report says

REUTERS/Baz Ratner

A Saudi man whose brother died in the Ethiopian Airlines Flight 302 plane crash at the scene of the crash, near Bishoftu, Ethiopia, on March 13, 2019.

This marks the first time an airline has formally asked to cancel an order of the jet.

Garuda already received one Boeing 737 Max 8 jet as part of a 50-plane order worth $4.9 billion, and plans to discuss with Boeing whether or not to return that plane, AFP reported.

The Indonesian airline had paid about $26 million for the order so far, AFP reported.

Ed Wray/Getty Images

A man examines the debris from Lion Air Flight 610, another Boeing 737 Max 8 that crashed last October.

It is not immediately clear whether Garuda will replace 737 Max 8s with another Boeing model, or with planes from another manufacturer altogether.

AFP cited I Gusti Ngurah Askhara Danadiputra, Garuda's Indonesia managing director, as telling Indonesian news site Detik: "In principle, it's not that we want to replace Boeing, but maybe we will replace [these planes] with another model."

Another Detik article published on Thursday, however, cited Danadiputra as saying that the carrier might look to order from another aircraft manufacturer altogether.

Garuda did not immediately respond to a request for comment from Business Insider.

REUTERS/Beawiharta

Shoes of passengers of Lion Air Flight 610 were laid out at Tanjung Priok port in Jakarta.

Lion Air Flight 610 crashed in the Java Sea in October, killing all 189 people on board. Ethiopian Airlines Flight 302 crashed on March 10, killing all 157 people on board. Both jets were effectively brand new.

While the causes of the two crashes are not yet known, investigators are examining whether the Maneuvering Characteristics Augmentation System (MCAS) - automated software designed to prevent the plane's nose from tipping upward - was incorrectly triggered, forcing both planes into a dive.

Read more: Boeing will start including a safety feature that customers previously had to pay for on all 737 Max aircraft

Reuters Graphics

Boeing is planning a software update to the 737 Max 8 that can automatically position the plane's nose to avoid an aerodynamic stall. The firm hopes to finish the update by Monday, The Associated Press reported this week.

The US, Canada, and more than 50 other countries have grounded their Boeing 737 Max 8 planes in light of the disasters.

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