Turbulent times: The man taking on Boeing with a $22-billion jet order at stake

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December 18, 2018 12:05 AM

Lion Air co-founder Kirana threatens to scrap plane orders; Kirana is one of the planemaker’s biggest customers worldwide.

Lion Air co-founder Rusdi Kirana (File photo)

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

The man standing up to the US aviation giant is Rusdi Kirana, Lion Air’s owner, and while he was little known to the public outside Southeast Asia before the crash, he’s something of a legend in the industry. Eighteen years after he and his brother rented a Boeing 737-200 to start a service from Jakarta to Bali, Kirana, 55, has turned 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 Southeast Asia,” said 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 SE. Lion Air is the third-largest buyer of Boeing’s updated 737. But seven weeks after a two-month-old 737 Max jet operated by the carrier plunged into waters off Jakarta, Kirana has started a public spat with the planemaker. Lion Air is drafting documents to scrap its $22 billion dollars of orders with Boeing because, Kirana says, the manufacturer unfairly implicated his airline in the disaster.

“I was in a tough situation and they decided to beat me up,” Kirana said 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 wouldn’t 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 is “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 criticized Lion Air’s safety culture. The plane’s cockpit voice recorder has yet to be found.

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