The Wall Street Journal: Lion Air considers canceling giant Boeing order after Indonesia crash

The Wall Street Journal: Lion Air considers canceling giant Boeing order after Indonesia crash

JAKARTA, Indonesia—Lion Air’s co-founder says the giant low-cost carrier may cancel orders for more than 200 Boeing planes as relations between the two companies sour over an air crash that killed 189 people in October.


“I’m seriously considering canceling it,” Rusdi Kirana, co-founder of Indonesia’s Lion Air Group, told The Wall Street Journal on Wednesday. He cited “disappointment” with a Boeing BA, -4.85% statement last week that appeared to cast blame on Lion Air for the Oct. 29 crash of Flight 610. The new Boeing 737 MAX jet plunged into the Java Sea shortly after takeoff.


Canceling the orders could deprive the Chicago-based plane maker of one of its largest customers. Lion Air Group, which in 2017 became the first company to commercially operate a MAX jet, Boeing’s latest iteration of the 737, is one of the world’s top buyers of the planes. It has ordered 251 of them with a list price of more than $25 billion. On Boeing’s list of publicly identified customers, only Southwest Airlines, with 280 orders, is scheduled to receive more of the planes.


Aviation analysts, however, expressed skepticism that Lion Air could alter a major order, which typically involve deposits and include penalty clauses for canceling. Deposits alone can amount to around 5% of purchase price, although may only be made on planes closer to delivery dates.


An expanded version of this report appears at WSJ.com.


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