This article has been translated by PwC Indonesia as part of our Indonesia Infrastructure News Service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.
Bisnis Indonesia - Industri aviasi: RI bakal jadi pemain kunci
By Lorenzo A. Mahardhika
Bisnis, Jakarta – Indonesia is predicted to be a key player in the global aviation industry by 2037 with potential passenger movements forecasted to reach 390 million.
Boeing Asia Supply Chain Regional Vice President said that the prediction was in line with Indonesia’s role in the supply chain of the global aviation industry.
Currently, Boeing has four aircraft component suppliers from Indonesia, namely PT Dirgantara Indonesia, Pudak Scientific, Collins Aerospace Indonesia, and Jabil Circuit Indonesia.
“Boeing already has existing suppliers from Indonesia in its production system, demonstrating Indonesia’s capability and competitiveness in this industry,” he explained at Boeing’s media briefing in Jakarta on Monday (10/6).
Abler added that the aeronautics supply chain was a tightly regulated industry sector. Therefore, each company supplying components for Boeing must meet certain qualifications and standards.
He mentioned that Boeing has invested in suppliers with high future potential and stringent standards. Boeing also offers technical training to ensure that the components produced meet aviation safety and security standards.
“If [the suppliers] have potential and are capable, we will invest and partner with them to create good quality products,” Abler stated.
He added that he believes Indonesia can dominate the global aviation market as it currently has the highest number of passengers in Southeast Asia.
Therefore, he emphasised that Boeing was bolstering the competitiveness of Indonesia in the aviation sector.
With the significant aviation potential of Indonesia, Boeing Indonesia Country Managing Director Zaid Alami added that several types of fleets were being offered to national airlines.
He said that the Indonesia was the number one aviation market in Southeast Asia in 2019, before the Covid-19 pandemic.
“We believe Boeing has a fantastic line of products to support growth in Indonesia,” Alami said.
He said that one of the aircraft being offered to customers in Indonesia was the Boeing 737 Max with a capacity of around 150-189 passengers.
Alami said that the Boeing 737 Max series was the best-selling aircraft marketed by Boeing.
Next, Boeing also has its flagship aircraft, the 787 Dreamliner. According to him, the 787 Dreamliner series is the best fuel-efficient aircraft in its class as it uses the latest technologies.
Besides that, Boeing is currently developing the 777X series that is a wide-body aircraft. He said that the 777X series is currently still in the flight-testing phase.
Alami mentioned that the US manufacturer was also offering several freighter options. However, he did not specify the types of freighters being offered to airlines in Indonesia.
“Boeing will continue cooperating with [airline] customers in Indonesia to help them grow and realise their plans,” Alami said.
Alami added that cooperation between Indonesia and Boeing has been established for around 75 years. According to him, developments in the supply chain of the global aviation industry will not only positively affect Indonesia, but also Boeing.
“We want to continue developing and see how the company can partner [with companies in Indonesia], which will create added value for Boeing, Indonesia, and the global aviation industry,” Alami stated.
He mentioned that the effort was not only focused on production operations, but also extended to the company’s entire global supply chain for components and spare parts.
“Our primary commitment is to ensure flawless production across all supply chains worldwide for all aircraft manufactured by Boeing,” he explained.
He mentioned that Boeing has also implemented numerous changes within its production. Alami said that his company was leaving the door open for cooperating with companies from Indonesia to boost aircraft safety and security.
Meanwhile, state-owned airline Garuda Indonesia remains optimistic about the safety and security of the Boeing aircraft they ordered for expansion this year.
Garuda is planning to add 8 more aircraft in 2024. The aircraft consist of 4 Boeing B737-800 NGs, 2 Airbus A330-300s, and 2 Boeing B777-300 ERs.
PT Garuda Indonesia (Persero) Tbk (GIAA) President Director Irfan Setiaputra affirmed the safety of the Boeing aircraft, noting that they did not order their newest model, the Boeing 717 Max.
“It is safe. The aircraft we ordered is not the new aircraft,” Irfan said.
Irfan continued that Garuda currently operated several Boeing aircraft, such as the 777-300ERs, 737-800 NGs, and others.
He emphasised his commitment to ensuring that all their current and future aircraft fleets meet safety and security standards. “It is a must, a priority,” Irfan said.
In February 2024, data from the Air Transportation Directorate General of the Transportation Ministry showed that Garuda operated 57 aircraft. This fleet comprised of 38 Boeing 737-800NGs, 12 Airbus A330-200/300/900s, and 7 Boeing 777-300ER.
Exchange rate
In Indonesia, regular airlines are facing challenges in the form of continuously increasing aircraft operating costs and fluctuations in the exchange rate of the rupiah against the US dollar.
Indonesia National Air Carriers Association (INACA) Chairperson Denon Prawiraatmadja estimated that approximately 70% of flight operation costs were influenced by the exchange rate of the rupiah against the US dollar. These costs include aviation fuel prices, aircraft lease costs, as well as maintenance and repair costs.
He affirmed that communication and coordination were required among related ministries on the impact of the exchange rate on the transportation sector, including air transportation.
With this pressure, he hopes that the Transportation Ministry will positively respond to INACA’s proposal to revise the upper airfare limit of economy flights. Currently, Denon is continuously discussing with related regulators to revise the upper airfare limit.
“Our concern is currently the ministries that play a role in determining the increase in transportation prices. Not only air transportation,” he said recently.
Denon continued that the government could provide support for the air transportation sector so that it will continue developing amid the exchange rate correction trend.
“The form of support can be more efficient and effective airport development, focused on refining the hub and spoke concept organisation,” Denon said.
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