Lion Air CEO says it may cancel Boeing 737 MAX orders

A Lion Air Boeing 737-800 plane prepares to land at the Sukarno-Hatta airport in Tangerang on the outskirts of Jakarta. (Reuters)
Updated 06 December 2018
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Lion Air CEO says it may cancel Boeing 737 MAX orders

  • Lion Air is considering canceling orders for Boeing Co. 737 MAX jets following a crash that killed 189 people in October
  • Boeing declined to comment on contractual matters but industry sources say aerospace companies rarely leave room for unilateral cancelations

JAKARTA: Indonesia’s Lion Air is considering canceling orders for Boeing Co. 737 MAX jets following a crash that killed 189 people in October but has not yet made a decision, said the airline’s CEO Edward Sirait.

Sirait told a briefing that Lion Air was examining the legality of canceling orders but had not yet communicated with the manufacturer about the prospect.

The airline has 190 Boeing jets worth $22 billion at list prices waiting to be delivered, on top of 197 already taken, making it one of the largest US export customers.

Lion Air was reported to be reviewing Boeing airplane purchases and had not ruled out canceling orders as relations worsen in a spat over responsibility for the crash, according to sources.

Any cancelation of orders would need to be approved by the airline’s co-founders and co-owners, Rusdi Kirana and his brother Kusnan Kirana.

 

Rusdi Kirana ordered a review of airline purchases in response to Boeing’s statement last week focusing attention on piloting and maintenance topics related to the crash.

Boeing declined to comment on contractual matters but industry sources say aerospace companies rarely leave room for unilateral cancelations except in exceptional circumstances.

Bankers and some analysts say Lion Air and Southeast Asian rivals over-expanded and would be comfortable with fewer orders.

Lion Air, as a private company, does not publicly disclose information about its financial position.

Loss-making national carrier Garuda Indonesia has reported pressure from higher oil prices and a weaker currency.

FASTFACTS

Lion Air has 190 Boeing jets worth $22 billion at list prices waiting to be delivered, on top of 197 already taken, making it one of the largest US export customers.


Toyota recalls 70,000 vehicles to replace air bag inflators

Updated 12 December 2018
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Toyota recalls 70,000 vehicles to replace air bag inflators

  • Takata uses the chemical ammonium nitrate to create a small explosion and inflate the bags
  • Can deteriorate and burn too fast, blowing apart a metal canister

DETROIT: Toyota is recalling about 70,000 Toyota and Lexus brand vehicles in North America to replace air bag inflators that could explode and hurl shrapnel at drivers and passengers.
The recall covers the 2003 to 2005 Corolla, the 2002 to 2005 Sequoia, the 2003 to 2005 Tundra and the 2002 to 2005 Lexus SC.
Takata uses the chemical ammonium nitrate to create a small explosion and inflate the bags. But it can deteriorate and burn too fast, blowing apart a metal canister.
The Toyota and Lexus vehicles were recalled previously and the inflators replaced with new ones that still used ammonium nitrate. In the latest recall, Toyota will use inflators made by another company with a safer chemical.
Owners will be notified early next year. Toyota says it has replacement parts available.
About 65,000 of the recalled vehicles are in the US
Toyota says it’s doing the recall a year ahead of a schedule set by the US National Highway Traffic Safety Administration.
At least 23 people have died worldwide due to the problem caused by inflators made by Takata Corp., resulting in the largest series of auto recalls in US history. They cover 37 million vehicles and about 50 million inflators in the US About 100 million inflators are being recalled worldwide.
The recalls forced Takata of Japan to seek bankruptcy protection.