Lion Air CEO Says Possible Will Cancel Boeing 737 MAX Orders

Lion Air is considering canceling orders for Boeing 737 MAX jets following the crash that killed 189 people in October, but has not yet made a decision, the budget carrier's chief executive, Edward Sirait, said on Thursday. (Reuters Photo/Matt Mills McKnight)

By : Cindy Silviana | on 11:37 AM December 07, 2018
Category : Business, Corporate News

Jakarta. Lion Air is considering canceling orders for Boeing 737 MAX jets following the crash that killed 189 people in October, but has not yet made a decision, the budget carrier's chief executive, Edward Sirait, said on Thursday.

Edward told a briefing that Lion Air was examining the legality of canceling orders but had not yet communicated with the manufacturer about the prospect.

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

Reuters reported on Monday that Lion Air was reviewing Boeing airplane purchases and had not ruled out canceling orders as relations worsen in a spat over responsibility for the crash, according to sources.

Any cancellation of orders would need to be approved by the airline's co-founders and co-owners, Rusdi Kirana and his brother Kusnan Kirana.

Rusdi Kirana is a co-founder and co-owner of Lion Air, Indonesia's largest budget carrier. (JG Photo/Dion Bisara) Rusdi Kirana is a co-founder and co-owner of Lion Air, Indonesia's largest budget carrier. (JG Photo/Dion Bisara)

Rusdi ordered a review of airline purchases in response to Boeing's statement last week focusing attention on piloting and maintenance topics related to the crash, Reuters reported on Monday.

Boeing declined to comment on contractual matters but industry sources say aerospace companies rarely leave room for unilateral cancellations except in exceptional circumstances.

Bankers and some analysts say Lion Air and Southeast Asian rivals over-expanded and would be comfortable with fewer orders.

Lion Air, as a private company, does not publicly disclose information about its financial position.

Loss-making national flag carrier Garuda Indonesia has reported pressure from higher oil prices and a weaker currency.

Boeing declined to comment on contractual matters but industry sources say aerospace companies rarely leave room for unilateral cancellations except in exceptional circumstances.

Reuters

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