Jakarta, Mar 23 (AP/UNB)— In a blow for Boeing, Indonesia's flag carrier is seeking the cancellation of a multibillion dollar order for 49 of the manufacturer's 737 Max 8 jets, citing a loss of confidence after two crashes within five months.
It is the first announcement of a cancellation since Boeing's new model aircraft were grounded following fatal crashes in Indonesia and Ethiopia.
PT Garuda Indonesia, which had ordered 50 Max 8 jets in 2014 and had received just one plane last year, sent a letter to Boeing last week requesting to cancel the order worth $4.9 billion, company spokesman Ikhsan Rosan said Friday. The carrier has so far paid Boeing about $26 million for the order.
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."
He said that Garuda plans to meet with Boeing representatives next week in Jakarta to discuss details of canceling 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.
Meanwhile, in Europe, Polish national carrier PLL LOT said it was considering asking for financial compensation from Boeing or even a delay to deliveries of purchased 737 Max 8 aircraft after the planes were grounded globally following the crash in Ethiopia.
In a statement to the AP on Friday, LOT said it would wait for communications from Boeing and flight regulators on whether to put the Max 8 planes back into service. LOT has five 737 Max 8 planes and is to receive nine more this year. Its total fleet counts over 80 aircraft.
Another Polish carrier, charter airline EnterAir, said Friday it would also seek damages. It has two Max 8 planes and has placed orders for another four.
Earlier this month, Norwegian Air Shuttles said it would seek compensation from Boeing. It had grounded its 18 Boeing 737 Max 8 aircraft.
With Boeing's backlog of 4,600 unfilled orders for Max jets, the loss of the Garuda order figures to have little financial impact on the Chicago-based company. The danger is that other airlines could follow, particularly if investigators fault the plane for the accidents in Indonesia and Ethiopia.
"We think other cancellations may follow as global customers remain spooked after two crashes with seemingly similar causes," Jim Corridore, an airline analyst with CFRA Research, said in a note to clients.
Corridore said, however, that if Boeing delivers a software patch to a flight-control system suspected in the crashes, and the planes are allowed to resume flying, "most customers will be reassured." He said investors will eventually focus on strong demand for airliners.
The Wall Street Journal reported late Friday that federal investigators are looking into whether Boeing gave U.S. regulators and the company's customers incomplete or misleading information about the jets. The report cited people familiar with the matter who were not named.
Earlier this week, a person briefed on the matter told The Associated Press that U.S. prosecutors are looking into the development of the 737 Max jets. The Transportation Department's inspector general is also investigating the FAA's approval of jets, a U.S. official told AP.
Boeing Co. shares closed Friday down $10.53, or 2.8 percent, at $362.17 amid a broad stock market decline. Boeing shares have dropped 14 percent since the Ethiopia Airlines crash.
Dhaka, Mar 20 (UNB) – Bangladesh’s leading private airlines US-Bangla Airlines is going to launch its maiden flights to India’s Chennai on March 31.
It will be the airline’s first flight to a south India city, US-Bangla CEO Imran Ashif announced this at a press briefing held at a city hotel on Wednesday.
Initially three flights will fly from Dhaka to Chennai via Chattogram on Sunday, Tuesday and Thursday and will return on the same day. The flight will leave Dhaka at 9:10am and reach Chennai at 12:45pm. The departure from Chattogram will be at 10:45am.
The flight will leave Chennai at 1:30pm and reach Dhaka at 6:00pm. The arrival in Chattogram will be at 4:30pm (Bangladesh standard time).
The minimum one-way fare is set for TK 15,043 and return fare Tk 22,000 for Dhaka Chennai route. On the other hand minimum one-way fare Tk 16,045 and return fare Tk 25,000 on Chattogram-Chennai route. The fares include all taxes and surcharges.
The Boeing 737-800 flight which will fly to Chennai has 164 seats — eight in business class and 156 in economy.
Dhaka, Mar 20 (UNB) – Leaders of three of the most powerful business associations of the country—BGMEA, BTMA and BKMEA on Wednesday urged the government not to raise gas prices saying that they would have no option but to fold-up business if gas price is hiked unreasonably.
“How could we sustain our industries if gas price is hiked 132 percent as proposed by the gas distribution companies?” said Siddiqur Rahman, president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), while reading out a joint statement of the three leading business bodies at a press conference.
He said the proposed gas price hike, if implemented, will have a big impact on the overall garment and textile sector as it will increase the overall cost by 5 percent.
He said gas is a primary fuel of many linkage facilities like boiler, washing and finishing machines.
“The gas price hike may cause a great disaster for the whole sector”, he said adding that the countries garment sector has been under a tremendous pressure following the labour wage increase against the backdrop of a competitive apparel price in the global market.
“Gas price hike will push up our production cost after which the other competing countries like Vietnam and Myanmar will snatch the market opportunity,” said the BGMEA president.
He termed the gas price hike a contradiction to the government’s commitment to offer job to at least one person from each family as the proposal will block the creation of new employment by disrupting industrialisation.
He said the Titas Gas was seeking the price hike to give 35 percent dividend to its shareholders.
“But it would not be wise to raise gas tariff considering the interests of a particular segment only,” he added.
Bangladesh Textile Mills Association (BTMA) president Mohammad Ali Khokon said, “If gas price is raised, the production cost of per kg of thread will go up by Tk 7.72 or 9 Cents in US currency while currently the local producers have to incur a loss of Tk 30 per kg of thread.”
“So, end of the day we have to count a loss of Tk 32.92 or US 39 cents in production of each kg of thread,” Khokon said.
He noted the export-oriented apparel sector is dependent on local textile sector for their primary sources of fabrics.
“So, if the textile sector gets affected by gas price hike, it will have multiple effects on the economy and a major shock will be felt by the banking sector as banks have a big financing of Tk 1.60 lakh crore in the sector,” he said.
He said the government has increased the gas price on six occasions while power tariff was increased by 400 percent.
Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) acting president Mansur Ahmed also addressed the press conference.
Dhaka, Mar 20 (UNB)— Huawei, one of the world’s leading ICT solutions providers, recently concluded its global flagship CSR programme ‘Seeds for the future’ for the fifth time in Bangladesh.
Ten students were picked through the selection rounds at five noted universities.
Students from Bangladesh University of Engineering and Technology, Dhaka University, Rajshahi University of Engineering and Technology, Khulna University of Engineering and Technology, and Chittagong University of Engineering and Technology covered the selection rounds.
Senior faculty of respective departments and an expert team from Huawei acted as jury.
The selected students will be taken to China for exclusive career oriented ICT training and cultural expedition on the second week of April for two weeks.
Starting in 2008, ‘Seeds for the Future’ has been implemented in 108 countries and international organisations, benefiting over 30,000 students from 350 universities. Among them, more than 3,600 university students have taken a study trip to the Huawei headquarters in Shenzhen.
Dhaka, Mar 20 (UNB) — The Asian Development Bank (ADB) has signed a $14.2 million loan with a local company to enhance inclusiveness in Bangladesh’s agribusiness sector.
It will support the expansion plans of Sylvan Agriculture Limited (SAL), a PRAN-RFL Group (PRAN) company, one of the largest food and agribusiness companies in the country.
“ADB’s second loan to SAL will further improve the agribusiness sector in Bangladesh through increased private sector investment,” said ADB Investment Specialist for Private Sector Operations Tushna Dora, the bank said in a statement on Tuesday.
Dora said agriculture provides nearly half of all employment in the country and supports over 70 percent of the total population. The loan will enhance the livelihoods of thousands of local farmers, with a focus on empowering women.
It will finance new processing facilities to produce potato chips, potato flakes, and pasta. Women will comprise at least half of the 450 people directly employed in the new facilities.
Gender wage gaps will be reduced, women’s facilities introduced, and greater technological assistance provided to women farmers.
Potatoes for the new processing facilities, located in Habiganj industrial park, will be sourced from around 2,000 contract farmers.
The project is ADB’s first repeat assistance to a private sector borrower in agribusiness. In 2012, ADB approved a $25.1 million loan to SAL for the construction of processing facilities.