Garuda Indonesia Airline Cancels $5B Order For 49 Boeing 737 Max Jets

Garuda Indonesia airline cancels 49 Max 8 jets from Boeing

A spokesman for Indonesia's national airline Garuda Indonesia says the company has requested a cancellation of a $4.9 billion order for Boeing's 737 Max 8 Jets following two deadly crashes that killed 346 people.

"Our passengers have lost confidence to fly with the Max 8," Garuda spokesperson Ikhsan Rosan told CNN.

The airline ordered 50 of the aircraft from Boeing in 2014 and has only received one so far. A letter sent to Boeing on March 14 requested the cancellation of the remaining 49, the spokesman confirmed. It's believed to be the first cancelled order for the Max 8 jets since the two crashes.

The 737 Max 8 jets were grounded worldwide following a fatal crash in Ethiopia that killed 157 people aboard - the second such disaster involving a Max 8 plane in five months. In October, a Lion Air flight crashed shortly after takeoff, killing all 189 passengers and crew aboard. Dozens of airlines have said they won't fly using the Max 8 jets until investigators better understand the two crashes and the jet has been certified safe to fly.

Data from both crashes indicate the Ethiopian Airlines and Lion Air planes suffered similar problems. The issue appears to be a new system Boeing installed on the Max 8 jets intended to prevent high-speed stalls. The system - known as the Maneuvering Characteristics Augmentation System (MCAS) is designed to push the nose of the 737 Max lower to avoid a stall was installed because the jet's engines were positioned differently on the Max 8 jets. Authorities investigating the Lion Air crash have identified a glitch in the automated anti-stall feature that kept pushing the plane's nose down. The Ethiopian Airlines flight had comparable problems. Before the fatal crash, the plane was seen to be climbing and descending rapidly while the pilot reported having "flight control" problems.

Boeing designed the new jets to be similar enough to previous 737s so that pilots wouldn't need to be re-trained on them - a costly process for airlines. The grounding of the Max 8 aircraft is expected to cost Boeing billions of dollars as airlines seek to recover the money they're losing while their fleets of Max 8 jets sit on a runway.

Safety concerns raised by the MCAS system has the world's largest manufacturer scrambling to update its software and a new pilot training program that would address issues with the 737 Max jets that were identified after the Lion Air crash.

Boeing has nearly 4,600 outstanding orders for the aircraft from airlines around the world. According to the Washington Post, the airline manufacturer is scheduled to meet with representatives from Garuda Indonesia to discuss the matter on March 28.

Photo: Getty Images

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