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

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.


Huawei given 90 days to buy from US suppliers

Trader Tommy Kalikas works on the floor of the New York Stock Exchange, Monday, Aug. 19, 2019. (AP)
Updated 20 August 2019

Huawei given 90 days to buy from US suppliers

  • Shortly after blacklisting the company in May, the Commerce Department initially allowed Huawei to purchase some American-made goods in a move aimed at minimizing disruption for its customers

WASHINGTON: US Commerce Secretary Wilbur Ross said Monday the US government will extend a reprieve given to Huawei Technologies that permits the Chinese firm to buy supplies from US companies so that it can service existing customers, even as nearly 50 of its units were being added to a US economic blacklist.
The “temporary general license,” due to expire on Monday, will be extended for Huawei for 90 days, he told Fox Business Network Monday, confirming an expected decision first reported Friday by Reuters. He also said he was adding 46 Huawei affiliates to the Entity List, raising the total number to more than 100 Huawei entities that are covered by the restrictions.
Ross said the extension was to aid US customers, many of which operate networks in rural America.
“We’re giving them a little more time to wean themselves off,” Ross said.
Shortly after blacklisting the company in May, the Commerce Department initially allowed Huawei to purchase some American-made goods in a move aimed at minimizing disruption for its customers.
The extension, through Nov. 19, renews an agreement continuing the Chinese company’s ability to maintain existing telecommunications networks and provide software updates to Huawei handsets.
Asked what will happen in November to US companies, Ross said: “Everybody has had plenty of notice of it, there have been plenty of discussions with the president.”
When the Commerce Department blocked Huawei from buying US goods earlier this year, it was seen as a major escalation in the Sino-US trade war.
The US government blacklisted Huawei, alleging the Chinese company is involved in activities contrary to national security or foreign policy interests.

BACKGROUND

The US blacklisted Huawei, alleging the Chinese company was involved in activities contrary to national security or foreign policy interests.

As an example, the blacklisting order cited a pending federal criminal case concerning allegations Huawei violated US sanctions against Iran. Huawei has pleaded not guilty in the case.

The order noted that the indictment also accused Huawei of “deceptive and obstructive acts.”
At the same time the US says Huawei’s smartphones and network equipment could be used by China to spy on Americans, allegations the company has repeatedly denied.
Huawei, the world’s largest telecommunications equipment maker, is still prohibited from buying American parts and components to manufacture new products without additional special licenses.
Many Huawei suppliers have requested the special licenses to sell to the firm. Ross told reporters late last month he had received more than 50 applications, and that he expected to receive more. He said on Monday that there were no “specific licenses being granted for anything.”