Ethiopia crash likely to hit planemaker's future as Airlines rethink orders

Kenya Airways is reviewing plans, could switch to bigger jets

The Boeing Co. 737 Max crash in Ethiopia looks increasingly likely to hit the planemaker’s future orders as mounting safety concerns prompt airlines to reconsider plans to purchase the jetliner.

Kenya Airways Plc is reevaluating proposals to buy the latest version of the single-aisle workhorse and could switch to Airbus SE’s rival A320 or upgauge to Boeing’s larger 787 Dreamliner, Chairman Michael Joseph said by email.

That’s as Indonesia’s Lion Air firms up moves to drop a $22 billion order for the 737 in favor of the Airbus model, according to a person with knowledge of the plan. One of the carrier’s Max jets crashed on Oct. 29, souring relations with Boeing after the manufacturer pointed to maintenance issues and human error as the underlying cause, even though the plane’s pilots had been battling a computerized system that took control following a sensor malfunction.

Sunday’s loss of an Ethiopian Airlines 737, in which 157 people died, bore similarities to the Asian tragedy, stoking concern that a feature meant to make the upgraded Max safer than earlier planes has actually made it harder to fly.

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.

Boeing is in crisis as airlines around the world ground the plane, with regulators from Australia to Mexico denying it access to their airspace. In a dramatic development, the European Aviation Safety Agency has split with the Federal Aviation Administration in banning the Max, leaving the U.S. regulator isolated in insisting that it’s still safe to fly.

Some 32 of those killed in the Ethiopian crash, which happened six minutes after the plane took off from Addis Ababa for Nairobi, were Kenyan citizens, the most for a single country.

Kenya Airways, sub-Saharan Africa’s third-largest carrier, revived plans to expand its network last year with a proposal to buy as many as 10 Max planes. Taking more of the older 737-800 version of the Boeing jet, which doesn’t feature the suspect system, is also an option.

“We will carefully follow the developments around the 737 Max,” Joseph said. “No decision has been taken yet.”

The African carrier has a fleet of about 40 aircraft including eight 787s and the same number of 737-800s. It completed a reorganization in 2017 that saw the government increase its stake to almost 50 percent, with long-time investor Air France-KLM Group shrinking its holding to less than 10 percent.