Indonesia: State-owned Companies Could Front A400M Deal

 - March 13, 2018, 12:48 PM
The only A400M operator in Asia-Pacific, the Royal Malaysian Air Force completed the acquisition of its A400Ms last March. (Photo: Chen Chuanren)

The Indonesian Air Force (TNI-AU) is willing to provide pilots and technicians to support flight operations of the Airbus Defence and Space A400M airlifters to be acquired by state-owned enterprise (SOE) PT Perusahaan Perdagangan Indonesia (PPI), commonly known as the Indonesia Trading Company, the service announced on its website in early March.

The announcement was made following a meeting between TNI-AU chief of staff, Air Marshal Yuyu Sutisna, and PPI president director Agus Andiyani in the PPI office in Jakarta. The statement highlighted that PPI, a logistics and distribution company, will operate two A400Ms that will be used to deliver goods to the less accessible regions in East Indonesia to tackle price disparity.

PPI, however, issued a statement on March 9 specifying that the company “has never ordered any aircraft and does not operate one,” and hopes to curb “public misconception.” PPI is Indonesia’s only state-owned trading firm, and is likely instead to facilitate contract negotiations.

The Indonesian Ministry of Defence revealed in January 2017 that it had approved a $2 billion budget for five A400Ms to modernize its ailing air transport fleet, consisting mainly of Lockheed Martin C-130B/H Hercules, some of which are of questionable airworthiness. A Letter of Intent for five A400Ms was signed last March between Airbus and PT Pelita, representing various state-owned companies in Indonesia, and it is uncertain if the two A400Ms mentioned in connection with PPI are part of the planned five aircraft.

It is not uncommon for SOEs to represent the TNI-AU in various arms contracts and negotiations. Such processes are known to be quite complicated, and have in the past raised uncertainties over the status of the programs concerned.