Abu Dhabi, UAEMonday 21 October 2019

Lion Air needs more 737 Max jets to spur growth

Indonesian carrier that suffered crash of now-grounded Boeing plane in October says it will cancel order for 187 aircraft if it is not satisfied with negotiations

A grounded Lion Air Boeing 737 Max 8 in Cenkareng, Indonesia. The carrier has 187 of the jets on order. Bloomberg
A grounded Lion Air Boeing 737 Max 8 in Cenkareng, Indonesia. The carrier has 187 of the jets on order. Bloomberg

Indonesia's Lion Air "urgently requires" more Boeing 737 Max jets to support its growth strategy once regulators approve the grounded model's return to service, the airline's co-founder, Rusdi Kirana, told Reuters on Wednesday.

He said the low-cost airline, which had previously threatened to cancel its order for 187 jets worth $21 billion (Dh77.12bn) at list prices, would need to be satisfied with the outcome of negotiations with Boeing before taking the planes.

"If they don't satisfy us, we will cancel the contract," Mr Kirana said.

All 189 passengers and crew on board one of Lion Air's new 737 Max jets died when the plane crashed into the Java Sea last October, the first of two deadly crashes that led to the craft being grounded worldwide.

In April, Mr Kirana lashed out over Boeing's handling of the accidents and accused the US manufacturer of looking down on the airline as one from the "third world", even though it is one of the plane maker's largest customers globally.

A final report on the Lion Air crash is expected to be released at the end of September, Indonesia's civil aviation authority said last week.

Boeing is working to finalise a software fix of issues with an anti-stall system called MCAS that activated on the two crashed jets. Regulators will then need to approve the model's return to service before airlines take more of the planes.

Garuda Indonesia is also in talks with Boeing about changes to its order for 49 737 Max jets, its chief executive, Ari Askhara, told Reuters on the sidelines of an event to announce a maintenance joint venture with Lion Air.

Lion Air and Garuda maintenance arm GMF AeroAsia plan to invest 10 trillion rupiah (Dh2.57bn) by 2028 to build a hangar on the island of Batam near Singapore alongside existing Lion Air facilities. Construction is due to begin this year, the airlines said.

Updated: August 14, 2019 04:23 PM