Rosan Reveals Boeing Purchase Agreement Before Pandemic, Garuda Only Received 1 Plane

JAKARTA - Minister of Investment and Downstreaming/Head of BKPM Rosan Perkasa Roeslani revealed that the plan to purchase 50 Boeing aircraft from the United States is part of a trade agreement between Indonesia and the United States.

Rosan added that the agreement to purchase the aircraft had occurred before the COVID-19 pandemic, through a contract between PT Garuda Indonesia Tbk (GIAA) and Boeing and until now, only one aircraft unit has been successfully delivered, while 49 other units have not been realized.

"Actually, the agreement between Boeing and Garuda existed before Covid, the purchase of 50 Boeing planes. Only one has been sent, so 49 are lacking," he told the media crew, Tuesday, July 29.

He explained that Garuda and Boeing had held further meetings, and discussed with the government, to discuss the continuation of the contract.

However, new aircraft shipments are projected to only be carried out in 2031'2032, due to the tight queue for Boeing production.

"Because this delivery is for the new Boeing, the fastest is 2031-2032 for the new aircraft. Well, therefore we achieve management trust is the first optimization of the existing aircraft," he said.

He added that while waiting for new aircraft shipments, the government encouraged Garuda Indonesia to maximize the use of available fleets and provide loans of more than 400 million US dollars, which were allocated specifically for aircraft maintenance and repair purposes.

"For maintenance and repair. Because there are so many planes from Citilink and Garuda that have been grounded, grounded cannot fly. Even though we still pay for leasing. Well, we said that first so they can fly," he explained.

Rosan added that currently, the average flight time for Garuda aircraft is only about 5 hours per day, far below the ideal standard of 12 hours per day, so that the Government assesses the importance of increasing efficiency, both in terms of aircraft utilization and optimizing flight routes.

"We say optimize first the grounded aircraft to be able to fly. Second, optimize it in terms of aviation, in terms of use from each aircraft, the third, we will carry out transformation in technology, in services, and others. And next, the Boeing is only 2031, 2032. So it's still 6-7 years from now. Now, we have to anticipate," he explained.

Rosan said that it was important for Garuda Indonesia management to have long-term planning related to fleet needs.

"If we just have the message, for example, in 2030, maybe only a few years will come. So what we convey to the Garuda Board of Directors, you are trying to make the planning," he explained.

According to him, the planning must include optimizing existing fleets, evaluating flight routes, and projecting new aircraft needs in the next 6 7 years, including possible renegotiation of terms and terms of purchase.

"Because there are still 49 more that have not been delivered. Of the 50 that were signed before COVID. At the time before COVID. Well, this is what I want to convey, so we will always honor the commitments we have. We are committed to buy 50, and it already exists, it has been signed. Now, maybe we will try to renego again from the better term and condition," he explained.

Rosan also emphasized that the short-term mindset among management must begin to be changed for the long term.

"Now we want the thinking from the management not only Garuda, all of this is only 2 years, 3 years, or 4-5 years like that. Not anymore, it must be long-term thinking too. Don't be motivated because we are in management, it's usually only 5 years, right. But long-term thinking must be done," he said.