Erick Thohir Explores Opportunity For Aircraft Procurement With Boeing

Erick Thohir Explores Opportunity For Aircraft Procurement With Boeing

Friday, 06 Dec 2024

The Minister of State-Owned Enterprises (SOEs), Erick Thohir, has revealed plans for the state-owned airline to explore collaboration with the American manufacturer Boeing for aircraft procurement. This announcement follows a bilateral meeting that Erick held with the Asian American Chamber of Commerce today at the Ministry of SOEs.

He noted that Indonesia is currently facing a shortage of aircraft. Ideally, the country should have around 700 aircraft, but post-COVID-19, Indonesia only possesses 390. "Today, I mentioned to Boeing that we are very eager to collaborate with them due to our insufficient number of aircraft," stated Erick Thohir at the Ministry of SOEs in Jakarta on Thursday, December 5, 2024.

According to him, an increase in the number of aircraft is essential to support the domestic aviation industry, especially considering Indonesia's status as an archipelagic nation.

"We cannot afford to be constrained by the same number of aircraft for the next ten years. This poses significant risks, given that we are an archipelagic country," he expressed. The Indonesian government will also engage in discussions with the Exim Bank, the U.S. export-import bank, and aircraft lessors regarding the procurement of Boeing aircraft, particularly for Garuda Indonesia, Citilink, and Pelita Air.

Among the list of aircraft lessors, Erick appears to prioritize state-owned airlines for the purchase of Boeing aircraft over other lessors. This preference is driven not only by the desire to balance trade with the U.S. but also by the belief that collaboration with Boeing could connect SOEs to the American market.

Despite this, there remains uncertainty regarding the potential collaboration, including the number of aircraft and the procurement value, as these factors depend on the specific needs of each airline and the capacity of the manufacturer. "I propose that, for instance, Exim Bank and the leasing company could negotiate directly with Garuda, Citilink, and Pelita. However, this should align with the roadmap of each airline, which is what we are pursuing," explained Erick.

According to the consolidated financial report of Garuda Indonesia as of September 30, 2024, the company, identified by the stock code GIAA, has set aside a total of IDR 494 billion for advance payments on aircraft purchases. This amount includes IDR 383 billion for Boeing aircraft, IDR 77 billion for Airbus aircraft, and IDR 77.13 billion for ATR 72-600 aircraft.

As of September 2024, GIAA has a fleet of 159 aircraft, a significant decrease from the previous total of 210 aircraft. The most substantial reduction occurred during the pandemic years of 2021-2022. Consequently, Garuda Indonesia will continue to optimize its fleet and existing fleet plans. (ferry@insightinnews.com)

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