Indonesia Accused of US Aircraft Coercion

Lawmaker claims Boeing deal tied to tariff reduction

A senior Indonesian lawmaker has accused the United States of pressuring the nation into purchasing 50 Boeing aircraft, alleging this was a condition for a significant tariff reduction.

Allegations of Forced Purchase

Rieke Diah Pitaloka, a member of Commission VI of the DPR, stated that the U.S. government, under President Donald Trump, mandated the acquisition of Boeing planes. This demand, she claims, was linked to a reciprocal tariff cut from 32 percent to 19 percent.

“Other nations refuse to buy Boeing aircraft, but America must force it because Boeing is one of the American economic symbols,” Rieke remarked during a meeting. “When it doesn’t sell, this is also a matter of its economic symbol.”

Concerns Over Aircraft Viability

Rieke expressed skepticism regarding the marketability of Boeing aircraft, noting that other countries are reportedly avoiding them. She suggested that the recent tariff agreement could still be subject to renegotiation.

The PDI-P politician also referenced past financial difficulties experienced by Garuda Indonesia, the national airline, which she linked to previous aircraft procurements. These issues, she indicated, involved corruption cases and problematic aircraft models.

“In fact, we know yesterday in our discussion that the purchase of Boeing and Bombardier by BUMN named Garuda caused financial problems until now,” Rieke stated. “Buying 737 Max was grounded and 787 Dreamliners were also problematic. Which Boeing should be bought?”

—Rieke Diah Pitaloka, Commission VI Member, DPR

In 2023, Garuda Indonesia faced significant financial challenges, posting a net loss. However, the airline has been implementing a fleet optimization strategy. According to an industry report, the global aviation market is projected to see a steady recovery, with passenger traffic expected to reach pre-pandemic levels by 2024 (IATA, October 2023).

Official Response and Airline Plans

State-Owned Enterprises (SOE) Minister Erick Thohir acknowledged the input from Parliament but did not directly address the specifics of the 50-aircraft purchase. He assured that all parliamentary suggestions would be followed up.

“Of course, we will follow up on the input and some of the solutions given,” Erick commented after the meeting, emphasizing the ministry’s role in protecting the economy while fostering value creation.

Separately, Garuda Indonesia President Director Wamildan Tsani confirmed that the plan for the 50 Boeing aircraft had received approval from the SOE Minister, President Prabowo Subianto, and the General Meeting of Shareholders. He stressed that the acquisition aligns with the airline’s health and business transformation strategy.

“The plan to purchase the aircraft is one of the long-term strategic steps in the company’s health efforts through business transformation by strengthening the fleet and optimization of the aviation network in the next 5 years,” Wamildan explained in a filing to the Indonesia Stock Exchange.

The timeline and specific phases of the purchase are still under discussion with Boeing, taking into account the manufacturer’s readiness to supply the required aircraft types.

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