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Lion Air, Boeing headed to a $22 billion feud

Lion-Air-Boeing-headed-to-a-22-billion-feud

The crash of a Boeing plane that killed 189 people in Indonesia is spiraling into a $22 billion feud between the aircraft maker and one of Asia’s most influential aviation bosses

In a rare occasion of a public dispute between the plane maker and one of its biggest customers, the head of PT Lion Mentari Airlines has threatened to cancel an order for billions of dollars of jets because of what he says is Boeing’s unfair reaction to the crash.

Seven weeks after a a two-month-old 737 Max jet operated by the carrier plunged into waters off Jakarta, Rusdi Kirana, Lion Air’s owner has began a public spat with the plane maker. The company is drafting documents to scrap it’s $22bn of orders with Boeing because Kirana says that the manufacturer implicated his airline in the disaster.

Kirana is aoften regarded as a legend in the aviation industry in his country. He is responsible for spearheading Lion Air into Indonesia’s largest airline, with one of the biggest order books in the world.

“He is, by virtue of the significance of Indonesia, right now probably the most important aviation figure in South-East Asia,” stated Shukor Yusof, founder of aviation consultancy Endau Analytics in Kuala Lumpur.

Kirana’s undiminished appetite for expansion – he wants to start flights to destinations as far a field as London and Dubai – has made him a key customer for both Boeing and its European rival Airbus. Lion Air is the third-largest buyer of Boeing’s updated 737.

“I was in a tough situation and they decided to beat me up,” Kirana stated in an interview in Jakarta, referring to Boeing’s response to Indonesia’s preliminary report into the accident. “They have been behaving unethically, they have been acting immorally in this relationship, so we just go our separate ways.”

Boeing refused to comment on the discussions with Kirana, but said in a statement that “Lion Air is a valued customer and we are supporting them through this difficult time”. The company said it was “taking every measure to fully understand all aspects of this accident, and are working closely with the investigating team and all regulatory authorities involved”.

The dispute revolves around Indonesia’s worst air disaster in two decades. Moments after takeoff on October 29, the pilots on Lion Air Flight 610 battled to control their 737 Max as faulty data from a sensor repeatedly forced the aircraft to tilt its nose down, according to the preliminary report, which included evidence for the plane’s flight data recorder, retrieved by divers.

The plane slammed into the Java Sea minutes after leaving Jakarta, killing everyone on board.

The report by Indonesia’s National Transportation Safety Committee last month didn’t find a cause for the crash. But it showed that a malfunctioning sensor wasn’t repaired before the fatal flight – even though it failed on the plane’s previous trip, and it criticised Lion Air’s safety culture.

The plane’s cockpit voice recorder is yet to be found.

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