Indonesian airlines Garuda Indonesia cancels $6 billion orders for Boeing 737-MAX 8

Negotiations with Boeing are ongoing. Garuda Indonesia has said, it could switch the order with other Boeing models. Airbus SE jets are not, yet, being considered.

On Friday, Fuad Rizal, the Chief Financial Officer of Indonesia’s national carrier Garuda Indonesia stated, the airlines has sent a letter to Boeing Co asking it to cancel an order for 49 737 MAX 8 narrowbody jets.

Garuda Indonesia could switch the order, valued at $6 billion at list prices, to other Boeing models, said Rizal. He went on to add, negotiations with Boeing were ongoing and Airbus SE jets were not being considered.

The development assumes significance since Garuda is the first airline to publicly confirm plans to cancel orders for the troubled 737 MAX 8 jets.

Indonesia’s Lion Air is also reconsidering orders for Boeing 737 MAX jets since its crash in October 2018.

As per Ari Askhara, Garuda’s CEO, customers had lost trust in the 737 MAX 8.

The airline has only one in its fleet at present.

“They have been relooking at their fleet plan anyway so this is an opportunity to make some changes that otherwise may be difficult to do,” said Brendan Sobie, Chief Analyst at CAPA Center for Aviation.

Last week, Askhara had stated, the cancellation for orders for 20 jets from Boeing are on the cards; the final decision will depend on what the U.S. Federal Aviation Administration does after the Ethiopian crash.

Boeing declined to comment on customer discussions.

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