The Boeing 737 Max crash in Ethiopia may hit the planemaker’s future orders as mounting safety concerns prompt airlines to reconsider plans to purchase the jetliner.
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, stated a Bloomberg report.
The airline is suspending delivery of four 737 Max jets it had on order for this year from Boeing, said Director Daniel Putut at an event in Jakarta.
On Sunday 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, reported Bloomberg.
There are reports suggesting that the airline is considering jets from Airbus’ A320 family, including the A321neo single-aisle model that is similar in size to the 737 Max series.
According to a Gulf News report, Kenya Airways is also re-evaluating proposals to buy the latest version of the single-aisle workhorse and could switch to Airbus SE’s rival A320 or upgrade to Boeing’s larger 787 Dreamliner. The report quoted the airline’s Chairman Michael Joseph’s email.
However, Cowen analyst Cai von Rumohr said it would be impractical for airlines to switch to Airbus’s A320 given its backlog is even longer than that of the 737 jet.
While near-term news for Boeing could get worse before it improves, von Rumohr does not see a meaningful long-term risk since the company has a software fix in hand, which will be rolled out “shortly,” stated another Bloomberg report.