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Lion Air founder is considering canceling the Giant Boeing Order after Indonesia Crash



Jakarta, Indonesia-Lion Air's co-founder says the giant low cost operator can cancel orders for more than 200

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aircraft as relationships between the two companies sew over an air accident that killed 189 people in October.

"I seriously consider it to be canceled," Rusdi Kirana, co-founder of Indonesia's Lion Air Group, told The Wall Street Journal on Wednesday. He quoted "disappointment" with a Boeing statement last week as he proved to blame Lion Air on October 29th in Flight 61

0. The new Boeing 737 MAX jets died in Java Sea shortly after launch.

It's not right, it's not ethical, "he said." We are partners; We are not enemies. "

Cancellation of orders could deprive the Chicago-based aircraft maker of one of its largest customers. The Lion Air Group, which in 2017 became the first company to commercially operate a MAX jet, Boeing's last iteration of 737, is one of the world's best buyer of the aircraft, has ordered 251 of them with a list price of more than $ 25 billion. In Boeing's list of publicly-identified customers, only Southwest Airlines, with 280 orders, is scheduled to receive more of the aircraft.

However, aviation analysts expressed skepticism that Lion Air could change a larger order, which usually involves deposits and includes cancellation clauses. Cancellation alone can amount to around 5% of the purchase price, but can only be done on flights closer to delivery dates.

The deadly crash of a The Lion Air Boeing 737 aircraft in Indonesia is one of the worst aviation disasters in 2018. The WSJ looks at some major issues that have occurred as investigators try to find the cause of crash. Photo: AP Images

"Cancellation is quite unusual because of the major penalties," said Brendan Sobie, chief analyst at the Asian Aviation Center in Singapore. "Deferrals are very common as you do not lose any deposits and just kick the can down the road."

Surveyors in the Indonesian led probe have suggested a malfunction sensor on Flight 610 led the aircraft's anti-stall system to activate, repeatedly forcing the nose to the plane, even though pilots fought to raise it. Data from the flight data recorder, retrieved shortly after the crash of about 100 feet of water, showed that the system was activated more than two dozen times in the last minutes of the plane.

After the crash, Boeing issued a message to operators on how to handle the problem. Some regulators, pilots and others have publicly criticized the company to not mark the operating principles and potential hazards of the new anti-stall system, which was not installed on older 737 models.

Investigators say they will not draw conclusions about what led to the accident to a final report next year.

After investigators issued their preliminary findings last week, Boeing published a statement of possible maintenance deficiencies at Lion, and noted that maintenance performed in the days before the deadline failed to solve the jet plane problems. It also compared the actions to the jet's second most recent flight, as a pilot is experiencing problems struck by automatic anti-stall measures, with those of the deadly plane, as the pilot did not seem to. It did not mention the new anti-stall system installed on the MAX jet . Boeing has addressed the system in other public statements and has emphasized an existing procedure in the manual that works to shut down the system.

  Investigators say they will not draw conclusions about what led to the accident to a final report next year.

Investigators say they will not draw conclusions about what led to the accident to a final report next year.


Photo:

BAY ISMOYO / AGENCE FRANCE-PRESSE / GETTY PHOTOS

Mr. Kirana said that Boeing seemed to try to divert attention away from problems with his anti-stall system and "build an opinion" that maintenance and pilot problems are due. "The problem is not maintenance and not in operation," he said, noting that the land crew had operated and checked the jet plane before the aircraft and found no problems. "The problem is that Boeing did not make a proper handbook. Everyone talks about it."

Boeing responded in a statement saying that "Lion Air is a valued customer and we support them through this difficult time. We are deeply saddened by the tragic accident on Lion Air. "

It added that" We take every effort to understand all aspects of this accident and work closely with the investigation team and all regulatory authorities involved. "

Dewey Muilenburg, managing Boeing's director, previously denied that the company deliberately retained information about the stall prevention function, saying that Boeing had described its relevant function in its manual.

Herr. Kirana, former CEO of Lion Air Group, who owns a lot of the company, said that Lion Air leaders had not yet talked to Boeing about the matter, but he would soon make a decision.

Write to Ben Otto at ben.otto@wsj.com


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