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Boeing faces first 737 Max 8 order cancellation after deadly crashes

Boeing to make standard warning light

Boeing is facing its first cancellation of an order for its 737 Max 8 jets since the new model aircraft were grounded following fatal crashes in Indonesia and Ethiopia. Indonesia's flag carrier said it is planning to cancel a $4.9 billion order, citing a loss of confidence after two crashes in the past six months.

PT Garuda Indonesia, which had ordered 50 Max 8 jets in 2014 and had received just one plane last year, has sent a letter to Boeing last week requesting to cancel the order, the company's spokesman Ikhsan Rosan said Friday. The carrier has so far paid Boeing about $26 million for the order.

Boeing declined to comment, telling CBS News it does "not comment on discussions with any of our customers."

Garuda joined other airlines worldwide in grounding its one Max 8 jet after the crash of an Ethiopian Airlines flight this month which killed all 157 people aboard. It came less than five months after 189 people died in the Oct. 29 crash of another Max 8, operated by Indonesian private carrier Lion Air.

"Passengers always ask what type of plane they will fly as they have lost trust and confidence in the Max 8 jet," Rosan told The Associated Press, "This would harm our business."

Deliveries

Boeing earlier this month said it was pausing deliveries of 737 Max model planes to customers after the U.S. joined many other countries in grounding all Boeing 737 Max jets. At the time, the planemaker said it would continue to build its 737 models at its current rate. 

Boeing had planned to boost 737 production this year, part of its plan to deliver more than 5,000 737 Max models that customers had ordered.

Garuda's Rosan said that Garuda plans to meet with Boeing representatives next week in Jakarta to discuss details of cancelling the order.

"We don't want to use Max jets ... but maybe will consider switching it with another Boeing model of plane," Rosan said. He said Indonesian passengers are afraid to take flights using any Max model, whether it's the 8, 9 or 10 series.

A preliminary report from Indonesia's National Transportation Safety Committee in December stopped short of declaring a probable cause of the Oct. 29 crash.

Officials have provided scant details since then, saying they are still analyzing data from a cockpit voice recorder that was only recovered from the sea in January.