Khazanah, MAB told to review Boeing 737 Max deal


Khazanah Nasional Bhd and Malaysia Airlines Bhd (MAB) have been instructed to review the latter’s purchase of the Boeing 737 Max aircraft after two incidents involving the same aircraft killed 346 people in the spate of five months.

On Sunday, Ethiopian Airlines’ Boeing 737 Max 8 crashed into a field six minutes after taking off from Addis Ababa, killing all 157 passengers and crew on the ill-fated aircraft.

The latest air tragedy came five months after the same Boeing-made aircraft belonging to Indonesia’s Lion Air plunged into the Java Sea, killing all 189 people.

Worries of the airworthiness of the plane, made by the Seattle-based aircraft maker, had some carriers scurrying to ground the Boeing 737 Max despite reasons behind the two air disasters are still unknown. Boeing 737 is one of the most used aircraft in the aviation sector.

At press time, airlines in Ethiopia, China, the Cayman Islands and Indonesia grounded Boeing 737 Max 8 jets. Flight tracking websites showed that Chinese airlines had substituted the Boeing 737 Max 8 for Boeing 737-800s.

As of January this year, the aircraft manufacturer said it had 5,111 firm orders for the 737 Max with Southwest Airlines flydubai and Lion Air making the three biggest orders. Some 350 of the planes had been delivered to customers.

MAB does not have any Boeing 737 Max operating in its current fleet, but the national carrier had made an order of 25 units of the planes. The first aircraft is expected to be delivered next year.

Economic Affairs Minister Datuk Seri Mohamed Azmin Ali said the agreement between MAB and Boeing Co must be reviewed as a safety measure following the latest crash. “The management of Khazanah has to look at this matter urgently to ensure the safety of the airline is paramount. They have to revisit whatever agreement that they have,” Azmin told reporters at the Parliament complex yesterday.

In 2016, MAB announced a deal to purchase 50 Boeing 737 Max, with 25 firm orders and 25 purchase rights. The deal is valued at US$5.5 billion (RM22.44 billion) at current list prices and deliveries are expected to start next year.

Transport Minister Anthony Loke said the government has not come to an immediate decision on whether MAB will continue with its purchase of the Boeing 737 Max 8.

“We don’t have any Boeing 737 Max 8, but it is supposed to be delivered next year. We will check with MAB, and MAB is studying the various options.

“There is no immediate decision right now. But I’m not saying we are continuing the deal or cancelling it, there is just no decision right now,” Loke said.

He added that even if all parties opted to review the purchase, they must take into consideration the legal implications.

Despite the latest incidents, several airlines had opted to maintain operations of the narrow-body aircraft. India’s SpiceJet Ltd, South Korea’s Eastar Jet Co Ltd and Singapore’s SilkAir Pte Ltd have all decided to keep their Boeing 737 Max 8 planes in the air.

Airlines in the US had also decided to continue to keep the planes flying, as at press time.

Malindo Air CEO Chandran Rama Muthy, when contacted, said the airline had ceased to operate the Boeing 737 Max aircraft.

“We do not operate the Boeing 737 Max any longer. Three months after taking delivery in mid-2017, we had returned the aircraft to Lion Group due to seating configuration issues,” Chandran told The Malaysian Reserve.