KQ mulls cancelling Boeing order after Ethiopia air crash

The Boeing 737 Max crash in Ethiopia looks increasingly likely to hit the planemaker’s order book as mounting safety concerns prompt airlines to reconsider purchases worth about $57 billion (Sh5.7 trillion).

VietJet Aviation JSC, which doubled its order to 200 of the aircraft priced at about $25 billion (Sh2.5 trillion) only last month, said it will decide on its future plans once the cause of the tragedy has been found.

Kenya Airways is reviewing proposals to buy the Max and could switch to Airbus SE’s rival A320.

Russia’s Utair Aviation PJSC is also seeking guarantees before taking delivery of the first of 30 planes with a $3.65 billion (Sh350 billion) value before customary discounts.

That’s as Indonesia’s Lion Air firms up moves to drop a $22 billion (Sh2.2 trillion) order for the 737 in favour of the Airbus jet, according to a person with knowledge of the plan. Separately, a $5.9 billion (Sh590 billion) Flyadeal order hangs in the balance.

The 737, which first entered service in the late 1960s, is the aviation industry’s best-selling model and Boeing’s top earner.

The re-engined Max version has racked up more than 5,000 orders worth in excess of $600 billion (60 trillion).

Boeing, whose shares have lost 12 per cent of their value this week, faces escalating financial risk after two disasters involving its newest narrow-body jet in the past five months.

The stock was up less than one per cent at $378.56 (Sh37,856) at 10:52 am in New York. A Lion Air Max plane crashed on October 29, souring relations with Boeing after the manufacturer pointed to maintenance issues and human error as the underlying cause, even though the flights' pilots had been battling a computerised system that took control following a sensor malfunction.