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Woe for Boeing as Garuda cancels big 737 MAX order

March 25, 2019 Headline News 1 Comment Email Email

Garuda Indonesia, which has just one Boeing 737 MAX 8 aircraft in its fleet, has scrapped a USD 5 billion order for another 49 of the planes – and that may be just the start of Boeing’s problems arising from the new plane.

The 737 MAX fleet has been grounded worldwide after disturbing similarities emerged between two fatal crashes involving the planes: the recent crash of Ethiopian Airlines flight ET 302 and the October 2018 crash of Lion Air flight JT 610.

The 737 MAX has been Boeing’s fastest-selling aircraft, with more than 5000 sold.

On Friday, Indonesian carrier Garuda became the first airline to announce it would cancel its order for the 737 Max. Garuda blamed a perceived pubic lack of trust and confidence in a jet which has crashed twice in five months with the loss of 346 lives. The order is said to be worth USD 4.9 billion (nearly AUD 7 billion).

The Garuda move raises immediate questions about the fate of Virgin Australia’s order for 30 of the planes. No airline operates 737 MAX aircraft in Australia, but Virgin Australia has ordered 30 of them and is due to take delivery of the first later this year.

Virgin Australia issued the following statement some days ago:

 Safety is Virgin Australia’s number one priority.

 Virgin Australia will not introduce any new aircraft to the fleet unless we are completely satisfied with its safety. 

There are currently no Boeing 737 MAX 8 aircraft in our fleet. 

We are closely monitoring the situation and will continue to work with Boeing, CASA, and other relevant authorities as more information becomes available.

Lion Air has also said it is considering cancelling an order for the plane, the Guardian reported.

In Canada, Montreal-based WestJet said it would stick with deliveries of 737 MAX aircraft once regulators approve the plane for re-entry into service. WestJet, a major operator of the model, forecast last month that its fleet would include 36 MAX 8s by the end of this year and 50 by the end of 2020.

Apart from order cancellations, Boeing may face:

  • Lawsuits from airlines which are losing millions of dollars through not being able to use 737 MAXs in their fleet while the grounding continues. 371 of the planes have been grounded worldwide – including 72 in the US operated by Southwest, American and United – disrupting schedules at great cost.
  • Lawsuits from families of the 346 people who have died in 737 MAX crashes. Victims’ families are already filing lawsuits against Boeing, Two fresh ones were filed in the US District Court on Wednesday, according to a report by Inc.com. It quoted lawyer Steve Marks, whose firm is representing families of 20 victims of the Lion Air crash, saying: “There is no question that Boeing is responsible for these accidents, and the only question is the degree of culpability.”

Whether Boeing is responsible, and if so, how much – will be up to courts to decide.

Boeing is making software upgrades that it expects to be approved by the US Federal Aviation Administration (FAA) in coming weeks.

According to the Guardian, the plane maker is also set to make a cockpit warning light compulsory in all 737 Max models sold. The safety feature had been installed in the American Airlines fleet – but the warning light was reportedly not bought by either Lion Air or Ethiopian. Officials told Reuters that Boeing would also retrofit 737 Max models it has already delivered, by installing the cockpit warning light.

American Airlines, which has 24 737 MAX planes in its fleet, says it has confidence in the planes after operating almost 18,000 flights.

Written by Peter Needham

Currently there is "1 comment" on this Article:

  1. AgentGerko says:

    I think the aircraft flaw will eventually be fixed and the MAX may in time become a very safe and reliable aircraft, although it will retain some bad reputation similar to that of the DC10, Electra and Comet, all of which had initial accidents due to a design flaw which was later fixed. It will, however, take some time for the FAA to recover its reputation, now that it’s come out that they allowed in many cases Boeing to certify its own safety. Now it seems Boeing is about to start a software upgrade that will be certified by the FAA. One now must ask did the FAA test the upgrade or are they just certifying it because Boeing says it works?

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