Garuda Indonesia’s Boeing jets deal: a win-win or political trade-off?

A US$3.2 billion plan by Indonesia’s flag carrier to buy 50 Boeing aircraft has drawn scrutiny over whether the order is a genuine business decision or a political trade-off linked to Washington’s recent tariff cuts on Indonesian imports.

The deal was unveiled by the White House on July 22 alongside news that US President Donald Trump had agreed to reduce his so-called reciprocal tariff on Indonesian imports to the US to 19 per cent from the initial 32 per cent he imposed in April.

The joint statement noted Indonesia’s intention to purchase dozens of Boeing aircraft, a move that had earlier been flagged by Trump himself in a social media post touting Jakarta’s agreement to buy “50 Boeing jets, many of them 777s”.

President Prabowo Subianto has since defended the procurement as necessary for modernising Garuda Indonesia, the country’s state-owned airline, which is emerging from near-bankruptcy.

“I don’t think there’s a problem because we need it, and they want to sell it. I’m determined to grow Garuda, and for that, we need new aircraft,” Prabowo said on July 16.

Prabowo assured that Boeing planes “are good enough”, and that the airline would purchase jets “from Airbus too”.