Indonesian Airline Cancels $4.9 Billion 737 Order, As Feds Ramp Up Boeing Probe
CHICAGO (CBS) -- Indonesia's national airline is canceling a $4.9 billion order for Boeing 737 Max aircraft, after two deadly crashes involving the planes in five months; and Boeing is promising changes as investigations into the company ramp up.
Sources tell CBS News the Justice Department's fraud unit subpoenaed documents, records, and data concerning the approval process for the 737 Max aircraft.
"If there is any kind of documentation that indicates that they knew there was a problem, and either didn't resolve to the satisfaction of the FAA or didn't reveal that, that could put them in jeopardy in terms of a possible criminal violation," said former FBI executive David Gomez.
PT Garuda Indoesia had ordered 50 Max 8 jets in 2014, and received the first plane from the order last year, but is requesting to cancel the order, citing a loss of confidence.
"Passengers always ask what type of plane they will fly as they have lost trust and confidence in the Max 8 jet," Garuda spokesman Ikhsan Rosan told The Associated Press, "This would harm our business."
Garuda is the first airline to announce a cancellation of 737 Max planes since the new model jets were grounded over fatal crashes in Ethiopia and Indonesia.
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.
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.
The Ethiopian Airlines crash earlier this month and the Lion Air disaster off Indonesia in October killed 346 people combined. Both planes crashed minutes after takeoff.
Preliminary flight data indicates the jets struggled to gain altitude, and published reports reveal a safety assessment Boeing gave the FAA appeared to downplay the operation of the planes' anti-stall systems. In the Lion Air flight, it's believed the anti-stall system repeatedly pushed the plane's nose down before the crash.
Boeing said it will add a warning system that alerts pilots to a sensor failure on the 737 Max. It had been offered as an $80,000 option, but it appears neither plane that crashed was equipped with the warning system.
"Most likely it was a connection between technology that may be new, and training that might not have been ready yet either, and crew procedures and airline procedures that also might have been a mistake" said aviation analyst Richard Aboulafia.
Ethiopian Airlines is defending its pilots after the New York Times reported they weren't properly trained on the 737 Max aircraft. The airline said its pilots went through all the training required by Boeing and the FAA to fly the Max 8.
(© Copyright 2019 CBS Broadcasting Inc. All Rights Reserved. The Associated Press contributed to this report.)
