Jakarta. Indonesia is scrapping the import duties on aircraft spare parts as the Iran war tests the global aviation industry.

Jakarta has unveiled its flight plan in navigating the conflict-induced headwinds and skyrocketing oil prices that have now topped $110 a barrel. On Monday, Indonesia — a country whose airline sector counts heavily on foreign-made components — unveiled fresh tax cuts. That includes a duty-free treatment for aircraft part imports.

“The government is granting an incentive: zero import duties on plane spare parts. We want to maintain and enhance our aviation industry,” senior minister Airlangga Hartarto told a press briefing in Jakarta.

“Hopefully, the exemption can also cut the industry’s operational costs.

Indonesia collected around Rp 500 billion ($29.3 million) in aircraft spares import duties throughout 2025. 

Airlangga claimed that the zero-duty move could be an engine for Indonesia's maintenance, repair, and operations (MRO) industry. The government is expecting $700 million worth of annual economic activities, and an additional $1.49 billion boost to the gross domestic product (GDP) output. Indonesia — an extremely populous nation that still struggles with unemployment — is also confident that it can spur roughly 1,000 direct jobs and over 2,700 indirect ones.

“The government will roll out the technical regulations on the zero import duty,” Airlangga said.

Indonesia is temporarily getting rid of the value-added tax on economy class tickets for domestic flights. The measures will apply for two months and are subject to further evaluations depending on how long the war lasts. 

Indonesia’s imports of goods grouped into the aircraft, spacecrafts, and parts thereof category hit $578.9 million in January-February 2026. This marks an around 896% jump versus the $59.7 million imports registered in the same period last year, according to the Trade Ministry. A few months ago, the Indonesia's Aircraft Maintenance Services Association (IAMSA) revealed that a whopping 99% of the country’s airplane parts are foreign-made.

“Maintenance work entirely uses imported materials. It’s only the manpower that comes from our country,” IAMSA secretary-general Freddy Fransiscus said last October.

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