Indonesia’s Lion Air plans to drop a $22 billion order for Boeing Co 737 Max jetliners and switch to aircraft from rivals Airbus SE as a rift between the companies widens following this week’s crash in Ethiopia, a person with knowledge of the proposal said.
Lion Air was already looking at scrapping the Boeing deal after one of its own Max planes came down on October 29, killing 189 people, and the African tragedy has made co-founder Rusdi Kirana more determined to cancel the contract, according to the person.
The move provides the first evidence of Boeing’s order book being hurt following Sunday’s crash, in which 157 people died when an Ethiopian Airlines 737 plunged to the ground six minutes after take-off. The incident bore clear similarities to the Lion Air tragedy, and countries including China, Australia and Singapore, as well as Ethiopia and Indonesia, have banned the aircraft. Lion Air is now evaluating jets from Airbus’s A320 family, the European company’s competitor to the 737 in the single-aisle market, with the focus on the biggest A321neo variant, the person said.
Relations between Lion Air and Boeing deteriorated last year after the US company pointed to maintenance issues and pilot error as the underlying causes for the loss of flight JT610 in the Java Sea, even though preliminary investigations had found that the 737 came down after a computerised system took control following a sensor malfunction. Anger over the planemaker’s comments led Kirana to say in December that he planned to cancel Lion Air’s order, the third-biggest for the upgraded model.