Boeing 737 MAX 8 Grounded: Garuda Indonesia, Lion Air Face Losses

TEMPO.CO, Jakarta - Following the grounding of every Boeing 737 MAX 8 aircraft in Indonesia, state carrier Garuda Indonesia concludes that by not operating their sole MAX 8 unit causes the company to endure monthly losses of Rp42 billion (USD 3 million).

However, another carrier operating the same aircraft as Garuda Indonesia is the low-cost carrier Lion Air that operated 10 MAX 8 units, which according to flight industry expert Arista Atmadjati, is facing the same financial losses.

“Lion Air might endure losses, but the amount would be 50-60 percent lower compared to Garuda Indonesia,” said Arista to Tempo on Sunday, March 31.

Read also: Garuda Opts to Continue Boeing Contract, But Drops 737 Max 8

According to Arista’s prediction, if Garuda is facing USD 3 million monthly loss from not being able to operate one of their planes, Lion Air could possibly be losing Rp21.3 billion (USD 1.5 million) per 737 MAX 8 units.

The fact that Lion Air operated 10 of Boeing’s MAX 8s prior to the grounding, Arista predicts that the carrier might be losing up to Rp213.6 billion (USD 15 million). However, these losses are mainly indirect losses such as potential revenues compared to the contract period between air carriers and aircraft manufacturers.

“So that is not monthly losses. It seems too many if Garuda claims to lose that much in a month,” said Arista.

Responding to the issue, Corporate Communications Strategic Lion Air Danang Mandala Prihantoro was not keen to give his opinion when asked by Tempo. “As for the [Boeing 737 MAX 8] being grounded, I am yet able to provide a statement,” said Danang in a text message.

FRANCISCA CHRISTY ROSANA