Lion Air Threatens to Cancel Orders After Latest Boeing Response

December 6, 2018, 1:57 PM UTC

Lion Mentari Airlines’ owner threatened to cancel $22 billion in aircraft orders from Boeing, saying the planemaker’s response to an accident report for a recent deadly crash unfairly implicated his carrier.

“I feel betrayed,” the Indonesian carrier’s co-founder, Rusdi Kirana, said by telephone Wednesday. “I’m preparing documents to propose cancellations. Everything is still under consideration now.”

The rupture between airline and planemaker is particularly striking since a Lion subsidiary was the launch customer for the Max, taking the model’s initial delivery in May 2017. Lion is the third-largest buyer of the updated 737, behind Southwest Airlines and Flydubai. The carrier is slated to get seven of the jetliners next year, followed by 24 in 2020 and 35 the following year, said George Dimitroff, head of valuations for Flight Ascend Consultancy.

“Lion Air is a valued customer and we are supporting them through this difficult time,” Boeing said in a statement. “Our hearts go out to everyone who has been impacted by this, and safety remains our number one priority. We are taking every measure to fully understand all aspects of this accident, and are working closely with the investigating team and all regulatory authorities involved.”

Questions surrounding the crash of a two-month-old 737 Max have hovered over the Chicago-based manufacturer and weighed on its shares. The stock has declined 4.7% (BA) since the Oct. 29 accident, which killed all 189 people aboard. U.S. pilot unions have questioned why flight crews weren’t alerted to new anti-stall software installed on Boeing’s newest models of the 737, a single-aisle workhorse that is the company’s biggest source of profit.

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