Reaffirming a Long-Standing Aircraft Deal
Rosan Roeslani, the CEO of the Danantara Indonesia Investment Management Agency, has clarified that the agreement for Garuda Indonesia, the nation’s flag carrier, to acquire a significant order of 50 Boeing aircraft was made well before the COVID-19 pandemic began. He confirmed that this substantial purchase is a key part of a new trade deal focused on tariffs between the governments of Indonesia and the United States. This clarification addresses any speculation about the timing of the deal and places it in the context of a broader, long-term trade relationship. Thus far, only one of the 50 airplanes has been delivered to Garuda Indonesia, leaving the vast majority of the order pending. The company’s commitment to this deal is being maintained, but with a practical eye on current circumstances.
Managing Fleet Operations Amidst Delivery Delays
Acknowledging the significant delays, Rosan Roeslani stated that Boeing has approached both Garuda Indonesia and Danantara to discuss the continuation of the deal, as the delivery of the new aircraft is not expected to happen until 2031 or 2032. Given this extended timeline, he has urged Garuda Indonesia’s management to focus on maximizing the operational efficiency of its current fleet. To support this effort, Danantara has provided approximately US$400 million in funding to the airline for essential fleet maintenance and upgrades. This financial support is particularly crucial because many of the aircraft operated by Garuda and its subsidiary, Citilink, had been grounded. By investing in the existing fleet, the airline can improve its capacity and service quality while awaiting the future delivery of the new aircraft.
Seeking Better Terms for a Long-Term Commitment
As the Minister of Investment and Downstreaming, Rosan Roeslani also emphasized the critical need for Garuda Indonesia to improve its operational efficiency by increasing the average daily flight hours of its aircraft. He pointed out that the airline’s planes currently fly for only five hours a day on average, significantly below the industry standard of twelve hours. To address these inefficiencies and position the airline for future success, Danantara has encouraged the national carrier to undertake comprehensive transformations in its technology, service, and other crucial operational aspects. While Rosan Roeslani respects the signed commitment to purchase the 50 aircraft, he concluded by stating that the government will seek further negotiations with Boeing. This negotiation aims to achieve more favorable terms and conditions for the deal, balancing the existing commitment with the current operational realities and long-term strategic benefits for the airline.
