Indonesian airline cancels $5 billion order for 49 Boeing 737 Max jets

Garuda Indonesia airline said the decision to cancel the multibillion-dollar order was due to fears “its business would be damaged due to customer alarm over the crashes.”
Technicians carry a ladder as they prepare to check Garuda Indonesia's Boeing 737 Max 8 airplane parked at the Garuda Maintenance Facility AeroAsia, at Soekarno-Hatta International airport near Jakarta, Indonesia, March 13, 2019.Willy Kurniawan / Reuters
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By Lucy Bayly

Indonesia’s flag carrier has requested cancellation of a $4.9 billion order for 49 Boeing 737 Max jets, citing customer concerns, the company said Friday.

It is the first airline to confirm plans to ax the troubled model from its fleet, after two fatal crashes that resulted in the loss of 346 lives.

Airline Garuda Indonesia ordered 50 of the aircraft in 2014 and has taken receipt of just one since then. A spokesperson for the airline said it sent a letter to Boeing on March 14 to cancel its order for the remaining number.

Garuda Indonesia spokesperson Ikhsan Rosan told the Associated Press on Friday the decision to cancel the multibillion-dollar order was because of fears “its business would be damaged due to customer alarm over the crashes.”

Representatives from Boeing will visit Jakarta next week for “further discussion,” Rosan said.

The news comes as the world’s largest airplane maker scrambles to address safety issues that grounded its entire global fleet of the 737 Max aircraft last week, following a fatal crash in Ethiopia that killed all 157 people on board a Max 8 plane — the second disaster in five months involving the same model of Boeing aircraft.

The FBI has reportedly joined a criminal investigation of the certification process for the jets, and the Department of Transportation has also launched a probe of the Federal Aviation Administration's approval of the aircraft.

Boeing has been working on a software update that is expected to correct issues with the 737 Max maneuvering characteristics augmentation system. That system, which can push the nose of a 737 Max lower to avoid a stall, is suspected as being a contributing factor in the crash of a Lion Air jet in Indonesia in October where 186 people died. French investigators are currently reviewing the flight recorders of the Ethiopian Airlines crash. Ethiopian Transport Minister Dagmawit Moges said preliminary data shows “a clear similarity” between the two crashes.

Boeing's entire fleet of 385 Max jets is currently grounded, with outstanding orders for some 4,600 planes. The only comparable single-aisle jet available is the Airbus 320A, which is currently facing a backlog.

Lucy Bayly

Lucy Bayly is the business editor for NBC News.