Jakarta. State-Owned Enterprises (SOEs) Minister Erick Thohir has instructed national airlines, including Garuda Indonesia (IDX: GIAA), its budget carrier Citilink, and Pertamina's Pelita Air, to purchase more American-made Boeing aircraft. As of Sept. 30, Garuda has allocated a total of Rp 494 billion ($31.25 million) in advance payments for aircraft acquisitions.

The directive came after a meeting between Erick Thohir and American business representatives, including US Ambassador to Indonesia Kamala Shirin Lakhdhir and Boeing officials, at the SOE Ministry's office in Jakarta on Thursday. The visit was part of ongoing talks following President Prabowo Subianto’s recent roadshow to several countries, including the US.

Erick emphasized the need for collaboration with Boeing as part of efforts to rebuild Indonesia's aviation sector, which has been severely impacted by the COVID-19 pandemic. Indonesia currently operates only 390 aircraft, far short of the 700-plane target set before the pandemic. "Solutions like this require cooperation, whether with Boeing, Airbus, China’s Comac, or Russian aircraft manufacturers," he said.

Among various aircraft lessors, Thohir is prioritizing Boeing aircraft purchases, aiming to balance trade relations with the US and strengthen ties between Indonesian SOEs and the American market.

Before proceeding, Thohir plans to ensure that a detailed procurement roadmap is established, allowing leasing companies to negotiate directly with Garuda, Citilink, and Pelita Air. He also hopes these negotiations will enhance trade relations between Indonesia and the US. Indonesia posted a trade surplus of $13.55 billion with the US as of October.

Garuda Indonesia’s financial report for September 30, 2024, shows the airline has set aside Rp 494 billion for aircraft down payments. This includes Rp 383.49 billion for Boeing aircraft, Rp 77.59 billion for Airbus aircraft, and Rp 33.13 billion for ATR 72-600 aircraft. As of September 2024, Garuda’s fleet consists of 159 aircraft, a significant decrease from 210 before the pandemic, with the largest reduction occurring between 2021-2022.

Garuda had previously signed an agreement on September 12, 2014, to purchase 50 Boeing 737 Max 8 aircraft. However, by December 31, 2021, 49 units remained undelivered due to the Boeing 737 Max 8 incidents. On April 16, 2021, Garuda requested a halt to all deliveries of the Boeing 737 Max 8.

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