Garuda Indonesia has dropped its order of Boeing 737 MAX 8, after the new plane model was involved in two recent fatal crashes.
Ari Ashkara, president and CEO of Garuda was quoted by the media as saying: “We have sent the letter to (Kevin) McAllister (president and CEO of Boeing Company) that we are cancelling the 49 units on order.”
He explained that customers have also lost their confidence and are refusing to fly with Boeing 737 MAX 8 type of aircraft, even if the aviation giant would take care of the current problem.
Garuda initially ordered 50 aircraft of the Boeing 737 Max 8, one of which was delivered in 2017. The aircraft has been grounded indefinitely by Indonesian aviation authorities.
Ari said Boeing executives would be heading to Jakarta on March 28 to negotiate with the airline.
“We have started discussions and our priority will be to find an alternate type (of Boeing aircraft) rather than dropping the order altogether, (as it would result in us) losing the downpayment.”
Ari stressed that the negotiation process will take time and if it comes to a deadlock, Garuda may take the option to purchase aircraft with other companies.
“However, according to the contract we cannot withdraw (the order), and I believe that Boeing will not ignore Garuda as one of their market leaders,” Ari said.
According to Channel News Asia, Lion Air will also be postponing delivery of four of its Boeing 737 Max 8 jets on order.