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Indonesia to cancel purchase of 49 Boeing 737 Max 8

media Southwest Airlines Co. Boeing 737 MAX 8 aircraft sit next to the maintenance area after landing at Midway International Airport in Chicago, Illinois, U.S., March 13, 2019. REUTERS/Kamil Kraczynski/File Photo

Garuda, the national carrier of Indonesia has told Boeing it will cancel a multi-billion-dollar order for 49 Boeing 737 Max 8 jets after the model was involved in two fatal crashes.  Garuda had already received one of the planes, part of a 50-aircraft order worth $4.9 billion when it was announced in 2014.

Shukor Yusof, head of Malaysia-based aviation consultancy Endau Analytics, said Garuda's announcement appeared to mark the first formal plans by a carrier to cancel an order for the 737 MAX 8.

It "will probably not be the last. There is a risk that Garuda's rival Lion Air, which also has many 737 MAX 8 orders, might make the same decision," he said.

"That is a risk. This has been made public by the Lion Air CEO. He stated publicly that he is considering" a cancellation.

But he added that it was difficult to predict whether more major carriers would follow suit.

"There are many unanswered questions and each airline has specific needs," Yusof said.

This month, Lion Air said it was postponing delivery of four of the jets after an Ethiopian Airlines Boeing 737 MAX 8 went down minutes into a flight to Nairobi, killing all 157 people on board.

The Ethiopian tragedy came after a Lion Air jet of the same model crashed in Indonesia in October, killing all 189 people on board.

Budget carrier Lion -- Southeast Asia's biggest airline by fleet size and a major Boeing customer -- said the now-postponed planes had been on track for delivery this year.

The black boxes of the Ethiopian Airlines are under investigation by France’s air-accident investigator, the Bureau d’Enquêtes et d’Analyses (BEA).

On 18 March, the BEA said in a press release that “clear similarities were noted by the investigation team between Ethiopian Airlines Flight 302 and Lion Air Flight 610.” A preliminary report on the Ethiopian airliner of flight ET302 is expected “within 30 days.”

Bloomberg reports that France has a “direct link to the crash” as the engines of the 737 Max 8 are made by through CFM International, a 50/50 joint venture between Safran Aircraft Engines and General Electric Co. CFM International itself is based in West Chester, Ohio. The joint venture was established in 1974; in 2009, the partnership was renewed until 2040, and the company provides its LEAP motors for 100% of the Boeing Max market.

According to French business daily La Tribune, CFM International broke records at the 2017 airshow Salon du Bourget with sales of 1,658 LEAP motors worth over 25 billion euros (20 of those motors were sold to Ethiopian Airlines).

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