Indonesia's Garuda cancels Boeing 737 order after crashes

Indonesia's national carrier Garuda is cancelling a multi-billion-dollar order for 49 Boeing 737 Max 8 planes after two fatal crashes involving the plane, the company said Friday, in what is thought to be the first formal cancellation for the model.

"We have sent a letter to Boeing requesting that the order be cancelled," said Garuda spokesman Ikhsan Rosan.

"The reason is that Garuda passengers in Indonesia have lost trust and no longer have the confidence" in the plane, he said, adding that the airline was awaiting a response from Boeing.

Crashes

A Nairobi-bound Boeing 737 MAX 8 operated by Ethiopian Airlines crashed on March 10 minutes after takeoff from Addis Adaba, killing all 157 on board. 

The same model flown by Lion Air crashed off the coast of Indonesia in October last year, killing all 189 on board.

Federal prosecutors and the US Department of Transportation are scrutinising the development of the model.

The justice department was looking at the Federal Aviation Administration's (FAA) oversight of Boeing, one of the people said. 

A federal grand jury in Washington, DC recently issued at least one subpoena to an entity involved in the plane's development, the source confirmed.

Separately, the US Department of Transportation's inspector general was also scrutinising the FAA's oversight of Boeing and the development of the 737 MAX, according to a person with knowledge of the matter who spoke on condition of anonymity.

The Wall Street Journal first reported on the justice department probe on Sunday and also said the Transportation Department's inspector general was reviewing the issue.