Review Boeing deal, Khazanah told

KUALA LUMPUR: Khazanah Nasional Bhd needs to revisit the agreement on Malaysia Airlines Bhd’s (MAS) purchase of Boeing 737 MAX aircraft after the weekend’s deadly air crash in Ethiopia, says Economic Affairs Minister Datuk Seri Azmin Ali.

He said the matter was urgent and should be looked into by Khazanah – the parent company of the national carrier – in order to ensure the safety of MAS passengers.

“Certainly, the management of Khazanah should look into the matter urgently. This is to ensure the safety of the airline is paramount.

“They have to revisit whatever agreement they had in the past,” he told reporters at the Parliament lobby.

On Sunday, an Ethiopian Airlines 737 MAX 8 bound for Nairobi, Kenya, crashed minutes after take-off from the Ethiopian capital Addis Ababa, killing all 157 people on board.

Following the crash, China’s aviation regulator ordered Chinese airlines to ground all Boeing 737 MAX aircraft, according to media outlet Caijing in a report.

In 2016, MAS announced a deal for 50 Boeing 737 MAX aircraft, with 25 firm orders and 25 purchase rights.

The deal was valued at US$5.5bil (RM22.7bil).

In September the following year, then Prime Minister Datuk Seri Najib Tun Razak during a visit to the White House told US President Donald Trump that MAS would, among others, buy eight ultra-long range 787-9 Dreamliner and eight 737 MAX aircraft from Boeing.

MAS and Boeing signed a memorandum of understanding for the aircraft that was witnessed by Najib, and the aircraft manufacturer had said that the order for the eight 787-9s was to be converted from the prior 737 MAX order.

In addition, MAS would add eight purchase rights for the 737 MAX.

The 16 aircraft would reportedly cost the airline US$3.63bil (RM15bil) at list prices and without the customary discount.

The 737 MAX, which first entered service in 2017, is the latest version of Boeing’s workhorse narrow-body 737 jet.

The crash in Ethiopia was the second involving the 737 MAX.

In October last year, a 737 MAX flown by Indonesian budget carrier Lion Air flying from Jakarta, Indonesia, on a domestic flight crashed 13 minutes after take-off, killing all 189 passengers and crew on board.

The cause of that crash is still being investigated, with the incident in Ethiopia raising further questions about the safety of the 737 MAX aircraft.

“This matter must be looked into, I will get more explanation from the management of Khazanah because there had been an incident prior to this,” said Azmin.

Azmin, in a statement issued later, expressed condolences to families of victims involved in the Ethiopian Airlines crash.

“I am deeply saddened at the tragic loss of lives and express my deepest condolences to the victims’ families and loved ones,” he said.

He said he was made to understand that the flight carried passengers from 35 countries.

Azmin said the flight was also reported to have had on board passengers who were headed for a United Nations Environment Assembly in Nairobi.

“I would also like to express our sympathies and solidarity with the government and the people of Ethiopia for this loss,” he said.