Lion Air said to mull pivot to Airbus after Boeing halt

NEW DELHI • Indonesia’s Lion Air, one of the biggest customers of Boeing Co’s 737 Max plane, is considering switching to Airbus SE amid plans to suspend existing orders it has with the US plane maker, according to a person familiar with the matter.

The carrier is suspending delivery of four 737 Max jets it had on order for this year from Boeing, director Daniel Putut said at an event in Jakarta yesterday. The decision comes after Ethiopian Airlines Flight 302 became the second 737 Max involved in a fatal crash, with one of Lion Air’s own 737 Max planes crashing in October, killing all 189 people on board.

The largest Indonesian carrier by domestic market share, Lion Air already refused to take delivery of a 737 Max jet due to be handed over in March, said the person, who asked not to be identified discussing internal matters. The carrier told Boeing about the decision last month, they said. A spokeswoman for Boeing declined to comment.

As it mulls future plans for its fleet, Lion Air is considering jets from Airbus’ A320 family, including the A321neo single-aisle model that is similar in size to the 737 Max series, the person said. Lion Air spokesman Danang Prihantoro said the company won’t comment further on delivery plans beyond this year and will provide updates on any new developments.

Since the deadly crash on Oct 29, which has been blamed on a malfunctioning sensor in the 737 Max, the relationship between Lion Air and Boeing has been tense. Anger over the plane maker’s response to the tragedy prompted Lion Air’s co-founder Rusdi Kirana (picture) to say in December he planned to scrap US$22 billion (RM90.2 billion) of Boeing jet orders. The Ethiopian crash, which bore some similarities to Lion Air’s has added to founder Kirana’s resolve, the person said.

The latest disaster has intensified pressure on Boeing, as aviation regulators in China and Indonesia join several airlines in grounding their Max 737 fleets.

Losing Lion Air, the first customer to operate the 737 Max 9 globally, would be a blow to Boeing, compounding the hit from the growing crisis around plane groundings. Shares of the US plane maker fell as much as 13% on Monday, the most since the 9/11 terrorist attacks, as investors assessed the damage to future prospects of the Chicago-based company’s most important aircraft family.

Boeing has sought to shore up confidence in the 737 Max after Lion Air Flight 610 crashed into the Java Sea on Oct 29. Since then, the US plane maker has emphasised the aircraft’s safety and defended the anti-stall Manoeuvring Characteristics Augmentation System which — triggered by erroneous sensor readings — pushed the Lion Air plane’s nose down dozens of times before it crashed. — Bloomberg