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TurboJet707
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"Indonesian government to force Indonesian airlines to switch to Boeing"

Thu Aug 22, 2019 1:32 pm

According to Dutch aviation news website Luchtvaartnieuws.nl, the Indonesian government wants Indonesian airlines to stop ordering airplanes from Airbus. The government is said to be angry about an EU decision to limit imports of Indonesian biodiesel from palm oil. By taking measures against the European aircraft manufacturer, the country wants to take revenge for that measure.

https://www.luchtvaartnieuws.nl/nieuws/ ... el-boeings
(Dutch only)

There is also talk of Indonesian airlines being asked to cancel outstanding Airbus orders and to convert them into orders for comparable Boeing products.

I am not sure Garuda and Lion will be happy to return to Boeing for large fleets of 737MAXes...
 
AESH16
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Re: "Indonesian government to force Indonesian airlines to switch to Boeing"

Thu Aug 22, 2019 1:38 pm

I'll be interesting to see how this will affect both the Garuda, Lion and the manufacturers...
 
Gulfstream500
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Re: "Indonesian government to force Indonesian airlines to switch to Boeing"

Thu Aug 22, 2019 1:43 pm

The future aircraft of Lion Air will be... the COMAC C919! :lol:

Or, they could have fun paying full price for an aircraft that they don’t even want... or get an okay deal for an E195-E2 (people wouldn’t mind not having a middle seat...)
Thinking of a good signature is hard...
 
Lufthansa
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Re: "Indonesian government to force Indonesian airlines to switch to Boeing"

Thu Aug 22, 2019 2:06 pm

Funny they didn't do something like punish Merceds Benz. That might impact on the elite getting around Jakarta.
Garuda's worked very hard to rebuild and talk about difficult position. Looks like the Indonesian fleet won't be
growing then. Things like the C919 won't be able to operate into certain countries just yet, I'd expect it to be an
issue for Australia and Singapore and probably Malaysia for a start.

Which brings up another point. Will a company like Air Asia increase frequencies from its other hubs at the expense
of its Indonesian staff?
 
WayexTDI
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Re: "Indonesian government to force Indonesian airlines to switch to Boeing"

Thu Aug 22, 2019 2:12 pm

Well, Indonesian airlines have the following Airbus aircraft on order (per Wikipedia):
- Airfast Indonesia: 8 A320's;
- Batik Air (subsidy of Lion Air): 178 A320neo's;
- Citilink (subsidy of Garuda Indonesia): 27 A320neo's;
- Garuda Indonesia: 14 A330-900’s;
- Indonesia AirAsia: 4 A320’s;
- Lion Air: 3 A330-300’s & 8 A330-900’s.
Total: 217 A320 family (mostly neo’s), 3 A330-300’s and 22 A330-900’s.

Airbus will have no issue filing the 200+ A320’s with other operators, so no issue there.
Regarding the A330-900, that’s not good news, as it’s about 10% of the current orders.

On top of that, the following have ATR aircraft on order (again, per Wikipedia):
- NAM Air: 1 ATR72;
- TransNusa: 2 ATR72’s;
- Wings Air: 5 ATR72’s.
If they ban European aircraft sales, what will those 3 airlines order instead of the ATR72?

I think this is just a negotiating tactic; hopefully Europe won’t bow to it, palm oil production is very damaging to the environment.
 
hooverman
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Re: "Indonesian government to force Indonesian airlines to switch to Boeing"

Thu Aug 22, 2019 2:22 pm

According to the article Lionair has said to follow all orders from the Government.
With the fines and all it will be an expensive thing to do.
 
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Momo1435
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Re: "Indonesian government to force Indonesian airlines to switch to Boeing"

Thu Aug 22, 2019 2:24 pm

Here's also a link in English from Bloomberg.

https://www.bloomberg.com/news/articles ... aft-bisnis
 
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afterburner
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Re: "Indonesian government to force Indonesian airlines to switch to Boeing"

Thu Aug 22, 2019 2:41 pm

For now it's only a discourse. I don't think this will really happen. Like Lufthansa said above, why hasn't government have the idea of stopping importing European cars like Mercedes Benz, BMW, Porsche, Lamborghini, etc. Also, the wives of many government officials and member of parliaments would be unhappy if the government ban European luxury items like Hermès handbags. :D

Btw, the Minister of Trade Engartiasto Lukita, who told the media about the idea of switching to Boeing from Airbus, is now under scrutiny from Indonesia Corruption Eradication Commission. He has evaded summons for questioning from the commission three times.
Last edited by afterburner on Thu Aug 22, 2019 2:56 pm, edited 3 times in total.
 
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Francoflier
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Re: "Indonesian government to force Indonesian airlines to switch to Boeing"

Thu Aug 22, 2019 2:42 pm

Will the government pay for the cost of cancellation and the revenue loss engendered by having to wait longer for new airplanes?
I'll do my own airline. With Blackjack. And hookers. In fact, forget the airline.
 
MIflyer12
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Re: "Indonesian government to force Indonesian airlines to switch to Boeing"

Thu Aug 22, 2019 3:18 pm

Francoflier wrote:
Will the government pay for the cost of cancellation and the revenue loss engendered by having to wait longer for new airplanes?


How much direct government support do the carriers already get? if you want to rely (from a business plan/cash flow point of view) on government support there can be consequences.
 
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BN727227Ultra
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Re: "Indonesian government to force Indonesian airlines to switch to Boeing"

Thu Aug 22, 2019 3:24 pm

TurboJet707 wrote:
According to Dutch aviation news website Luchtvaartnieuws.nl, the Indonesian government wants Indonesian airlines to stop ordering airplanes from Airbus. The government is said to be angry about an EU decision to limit imports of Indonesian biodiesel from palm oil. By taking measures against the European aircraft manufacturer, the country wants to take revenge for that measure.

https://www.luchtvaartnieuws.nl/nieuws/ ... el-boeings
(Dutch only)

There is also talk of Indonesian airlines being asked to cancel outstanding Airbus orders and to convert them into orders for comparable Boeing products.

I am not sure Garuda and Lion will be happy to return to Boeing for large fleets of 737MAXes...


Might be another discussion for another forum, but all I've heard about palm oil production is that it's an ecological nightmare.
 
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Aesma
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Re: "Indonesian government to force Indonesian airlines to switch to Boeing"

Thu Aug 22, 2019 3:31 pm

So, does the US buy palm oil from Indonesia ?

From what I see currently the EU imports 2/3 more than it exports to Indonesia, so there is always the possibility of upping the ante.

Trade wars are all the rage, after all.
New Technology is the name we give to stuff that doesn't work yet. Douglas Adams
 
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Polot
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Re: "Indonesian government to force Indonesian airlines to switch to Boeing"

Thu Aug 22, 2019 3:41 pm

Aesma wrote:
So, does the US buy palm oil from Indonesia ?

Yes, although not nearly to the same extent as the EU (where palm oil is more popular, canola and especially soybean oil is far more popular in US). In 2018 the US imported ~$1.09 billion of palm oil in general (Indonesia being number 1 source). In 2018 the EU imported almost 2 billion euros of palm oil from Indonesia alone.

https://www.ustradenumbers.com/import/palm-oil/
https://eeas.europa.eu/sites/eeas/files ... 321_en.pdf
 
Varsity1
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Re: "Indonesian government to force Indonesian airlines to switch to Boeing"

Thu Aug 22, 2019 4:14 pm

Aesma wrote:
So, does the US buy palm oil from Indonesia ?

From what I see currently the EU imports 2/3 more than it exports to Indonesia, so there is always the possibility of upping the ante.

Trade wars are all the rage, after all.


Yes, but not as much. Indonesia is incredibly far (physical distance) from the USA, so importing anything either way is rather expensive. New York City is 10,050 miles away straight line distance from Jakarta, never mind the numerous physical barriers.
"PPRuNe will no longer allow discussions regarding Etihad Airlines, its employees, executives, agents, or other representatives. Such threads will be deleted." - ME3 thug airlines suing anyone who brings negative information public..
 
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Polot
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Re: "Indonesian government to force Indonesian airlines to switch to Boeing"

Thu Aug 22, 2019 4:26 pm

Varsity1 wrote:
Aesma wrote:
So, does the US buy palm oil from Indonesia ?

From what I see currently the EU imports 2/3 more than it exports to Indonesia, so there is always the possibility of upping the ante.

Trade wars are all the rage, after all.


Yes, but not as much. Indonesia is incredibly far (physical distance) from the USA, so importing anything either way is rather expensive. New York City is 10,050 miles away straight line distance from Jakarta, never mind the numerous physical barriers.

Distance really doesn’t factor much into it, it is all about demand.
 
h1fl1er
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Re: "Indonesian government to force Indonesian airlines to switch to Boeing"

Thu Aug 22, 2019 5:31 pm

weren't these guys gonna stop all Max buys to punish boeing? Df they gonna buy then, mitsus?
 
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Aesma
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Re: "Indonesian government to force Indonesian airlines to switch to Boeing"

Thu Aug 22, 2019 7:56 pm

We eat more Nutella in Europe I guess. Although in my family we now buy an alternative that is organic and without palm oil.

I also know there was a controversy in France about this biodiesel from palm oil, a refinery was converted to make it, but environmentalists wanted it shut down, meanwhile employees would have lost their jobs. French colza producers wanted their crop to be used.

I see that the refinery (from Total) has now started a couple months ago, so far palm oil imports don't seem to be restricted.

Or if it's already refined biodiesel that is the culprit, then indeed France has voted, probably because the EU was going to, to remove the subsidy for biodiesel made from palm oil. This will also affect the production from the aforementioned refinery.
New Technology is the name we give to stuff that doesn't work yet. Douglas Adams
 
MaksFly
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Re: "Indonesian government to force Indonesian airlines to switch to Boeing"

Thu Aug 22, 2019 7:59 pm

They don't need to get the C919 but can surely look at the MC21. =)
 
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FredrikHAD
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Re: "Indonesian government to force Indonesian airlines to switch to Boeing"

Thu Aug 22, 2019 8:10 pm

Would Airbus lose money if the orders are cancelled or are they protected by the contracts? Perhaps Indonesia is giving Airbus a profit by cancelling, quite counter productive if so.
 
tomcat
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Re: "Indonesian government to force Indonesian airlines to switch to Boeing"

Thu Aug 22, 2019 8:25 pm

At the same time, Malaysia is threatening to not buy any European fighter jet for its fleet renewal:

https://www.euractiv.com/section/defence-and-security/news/malaysia-threatens-to-ditch-eu-fighter-jet-deal-over-palm-oil-curbs/
 
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Momo1435
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Re: "Indonesian government to force Indonesian airlines to switch to Boeing"

Thu Aug 22, 2019 8:28 pm

If this is indeed forces the government will probably also forbid the Indonesian airlines to make any penalty payments to Airbus.

Which of course could lead again to a juridical war between Airbus and Indonesia, which could of course result in the seizure of Indonesian aircraft when they are in other countries, not just in Europe. But then again, Airbus will keep on treating the Indonesian airlines as any of their customer, even if the orders are indeed cancelled. When such a ban is lifted by the government they of course won't have any issues with taking new orders and to start delivering new planes to the affected airlines. You don't want to get on the bad side of your customers.

This could turn into a big mess, but it might not.
 
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eta unknown
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Re: "Indonesian government to force Indonesian airlines to switch to Boeing"

Thu Aug 22, 2019 8:59 pm

And yet some years ago Indo filed a WTO complaint against the USA over their clove cigarette import restrictions... Did they punish Boeing that time?
 
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Dutchy
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Re: "Indonesian government to force Indonesian airlines to switch to Boeing"

Thu Aug 22, 2019 9:04 pm

For producing the palm oil, large parts of the Indonesian rain forest are cut down, that's why palm oil isn't sustainable. So a good thing the EU decided to limit t's import of this.
Many happy landings, greetings from The Netherlands!
 
filipinoavgeek
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Re: "Indonesian government to force Indonesian airlines to switch to Boeing"

Fri Aug 23, 2019 12:35 am

Not sure how much it would really affect things since most Indonesian carriers are predominantly Boeing anyway (apart from AirAsia and Citilink). Still sounds like a really bad idea anyway.
 
Varsity1
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Re: "Indonesian government to force Indonesian airlines to switch to Boeing"

Fri Aug 23, 2019 1:09 am

Polot wrote:
Varsity1 wrote:
Aesma wrote:
So, does the US buy palm oil from Indonesia ?

From what I see currently the EU imports 2/3 more than it exports to Indonesia, so there is always the possibility of upping the ante.

Trade wars are all the rage, after all.


Yes, but not as much. Indonesia is incredibly far (physical distance) from the USA, so importing anything either way is rather expensive. New York City is 10,050 miles away straight line distance from Jakarta, never mind the numerous physical barriers.

Distance really doesn’t factor much into it, it is all about demand.


It most certainly factors into it. It's a commodity. There are producers far closer in central and South America.
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TheFlyingDisk
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Re: "Indonesian government to force Indonesian airlines to switch to Boeing"

Fri Aug 23, 2019 1:15 am

eta unknown wrote:
And yet some years ago Indo filed a WTO complaint against the USA over their clove cigarette import restrictions... Did they punish Boeing that time?


How big is the share of palm oil exports compared to clove cigarettes? I would think palm oil is bigger.

Dutchy wrote:
For producing the palm oil, large parts of the Indonesian rain forest are cut down, that's why palm oil isn't sustainable. So a good thing the EU decided to limit t's import of this.


In terms of EU imports, soybeans have a much larger share of deforestation compared to palm oil - by a huge margin. So how come only palm oil is being targeted?

Fact of the matter is, the EU ban on palm oil is less to do with protecting the environment & more to do with protecting European industries.

Lufthansa wrote:
Funny they didn't do something like punish Merceds Benz. That might impact on the elite getting around Jakarta.


How big is the value of Mercedes-Benz imports to Indonesia? It's obvious that the Airbus orders are large scale & visible.

This is saber rattling & there's no doubt that the EU & Indonesia (plus to a lesser extent Malaysia) will have to sit down and arrange for an amicable solution. Thankfully they're not dealing with a loose cannon when they deal with Jokowi.
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LAX772LR
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Re: "Indonesian government to force Indonesian airlines to switch to Boeing"

Fri Aug 23, 2019 2:12 am

FredrikHAD wrote:
Would Airbus lose money if the orders are cancelled or are they protected by the contracts?

Contracts are only as good as the mechanism through which they can be enforced.

In most cases, that's a court... but the issue becomes a bit tricky when the parties involved sit within different borders, even if choice-of-law is expressly within the contract.
I myself, suspect a more prosaic motive... ~Thranduil
 
h1fl1er
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Re: "Indonesian government to force Indonesian airlines to switch to Boeing"

Fri Aug 23, 2019 2:19 am

Dutchy wrote:
For producing the palm oil, large parts of the Indonesian rain forest are cut down, that's why palm oil isn't sustainable. So a good thing the EU decided to limit t's import of this.


production of cane ethanol in brazil has similar knock-on effects, creating monoculture biosphere regions and depleting rainforest

no free lunch
 
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FredrikHAD
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Re: "Indonesian government to force Indonesian airlines to switch to Boeing"

Fri Aug 23, 2019 6:32 am

LAX772LR wrote:
FredrikHAD wrote:
Would Airbus lose money if the orders are cancelled or are they protected by the contracts?

Contracts are only as good as the mechanism through which they can be enforced.

In most cases, that's a court... but the issue becomes a bit tricky when the parties involved sit within different borders, even if choice-of-law is expressly within the contract.

Yes, enforcing the contract might become tricky, but for argument’s sake, do you have any idea what the contracts say (in general)? What if AF ordered an A320 Neo and cancelled the order, say just after it was coming into production?

/Fredrik
 
LifelinerOne
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Re: "Indonesian government to force Indonesian airlines to switch to Boeing"

Fri Aug 23, 2019 6:45 am

Well, than this LOI will probably not get firmed...

https://www.flightglobal.com/news/artic ... 0s-460418/

Cheers! :wave:
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FluidFlow
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Re: "Indonesian government to force Indonesian airlines to switch to Boeing"

Fri Aug 23, 2019 6:50 am

WayexTDI wrote:
Well, Indonesian airlines have the following Airbus aircraft on order (per Wikipedia):
- Airfast Indonesia: 8 A320's;
- Batik Air (subsidy of Lion Air): 178 A320neo's;
- Citilink (subsidy of Garuda Indonesia): 27 A320neo's;
- Garuda Indonesia: 14 A330-900’s;
- Indonesia AirAsia: 4 A320’s;
- Lion Air: 3 A330-300’s & 8 A330-900’s.
Total: 217 A320 family (mostly neo’s), 3 A330-300’s and 22 A330-900’s.

Airbus will have no issue filing the 200+ A320’s with other operators, so no issue there.
Regarding the A330-900, that’s not good news, as it’s about 10% of the current orders.

On top of that, the following have ATR aircraft on order (again, per Wikipedia):
- NAM Air: 1 ATR72;
- TransNusa: 2 ATR72’s;
- Wings Air: 5 ATR72’s.
If they ban European aircraft sales, what will those 3 airlines order instead of the ATR72?

I think this is just a negotiating tactic; hopefully Europe won’t bow to it, palm oil production is very damaging to the environment.


Around 200 good slots for the A320neo. Airbus could throw them dirt cheap at IAG financed by the cancellation penalties paid by Indonesia. Willie can rant about A but if the price is right (low) he will jump at the aircraft.
 
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OA940
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Re: "Indonesian government to force Indonesian airlines to switch to Boeing"

Fri Aug 23, 2019 9:03 am

Yes Indonesia, go into a trade war with the EU over the fact that you're destroying your environment to make oil. Genius.
A350/CSeries = bae
 
ixam500
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Re: "Indonesian government to force Indonesian airlines to switch to Boeing"

Fri Aug 23, 2019 9:35 am

How does a country expect to attract business and investment, when its government intervenes into decisions of PRIVATE businesses (such as Lion Air). If a country wants to experience strong economic growth, it has to provide legal certainty, since that is one of the most important factors for investors. Forcing PRIVATE airlines to order jets from a certain manufacturer unermines this aspect.
 
chiad
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Re: "Indonesian government to force Indonesian airlines to switch to Boeing"

Fri Aug 23, 2019 9:37 am

WayexTDI wrote:
Well, Indonesian airlines have the following Airbus aircraft on order (per Wikipedia):
- Airfast Indonesia: 8 A320's;
- Batik Air (subsidy of Lion Air): 178 A320neo's;
- Citilink (subsidy of Garuda Indonesia): 27 A320neo's;
- Garuda Indonesia: 14 A330-900’s;
- Indonesia AirAsia: 4 A320’s;
- Lion Air: 3 A330-300’s & 8 A330-900’s.
Total: 217 A320 family (mostly neo’s), 3 A330-300’s and 22 A330-900’s.

Airbus will have no issue filing the 200+ A320’s with other operators, so no issue there.
Regarding the A330-900, that’s not good news, as it’s about 10% of the current orders.

On top of that, the following have ATR aircraft on order (again, per Wikipedia):
- NAM Air: 1 ATR72;
- TransNusa: 2 ATR72’s;
- Wings Air: 5 ATR72’s.
If they ban European aircraft sales, what will those 3 airlines order instead of the ATR72?

I think this is just a negotiating tactic; hopefully Europe won’t bow to it, palm oil production is very damaging to the environment.


So ... Lion Air actually has a huge A320neo order since March 2013. I dont know why so few people know about it (or Wiki for that matter). Am I wrong about this order?
https://www.airbus.com/newsroom/press-r ... craft.html
Last edited by chiad on Fri Aug 23, 2019 9:38 am, edited 1 time in total.
 
majano
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Re: "Indonesian government to force Indonesian airlines to switch to Boeing"

Fri Aug 23, 2019 9:38 am

OA940 wrote:
Yes Indonesia, go into a trade war with the EU over the fact that you're destroying your environment to make oil. Genius.

But why is it the EU's business to worry about the Indonesian oil production methods? If the EU wants to act as some sort of world environmental policemen, they must realise that such a move has consequences and collateral damage.
 
Eiszeit
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Re: "Indonesian government to force Indonesian airlines to switch to Boeing"

Fri Aug 23, 2019 9:56 am

majano wrote:
OA940 wrote:
Yes Indonesia, go into a trade war with the EU over the fact that you're destroying your environment to make oil. Genius.

But why is it the EU's business to worry about the Indonesian oil production methods? If the EU wants to act as some sort of world environmental policemen, they must realise that such a move has consequences and collateral damage.


The EU limits IMPORTS it does not prohibit the production
 
majano
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Re: "Indonesian government to force Indonesian airlines to switch to Boeing"

Fri Aug 23, 2019 10:01 am

Eiszeit wrote:
majano wrote:
OA940 wrote:
Yes Indonesia, go into a trade war with the EU over the fact that you're destroying your environment to make oil. Genius.

But why is it the EU's business to worry about the Indonesian oil production methods? If the EU wants to act as some sort of world environmental policemen, they must realise that such a move has consequences and collateral damage.


The EU limits IMPORTS it does not prohibit the production

Ok, that makes sense. But it could still be interpreted as heavy-handed and hence the need to retaliate.
 
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Polot
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Re: "Indonesian government to force Indonesian airlines to switch to Boeing"

Fri Aug 23, 2019 10:04 am

Eiszeit wrote:
majano wrote:
OA940 wrote:
Yes Indonesia, go into a trade war with the EU over the fact that you're destroying your environment to make oil. Genius.

But why is it the EU's business to worry about the Indonesian oil production methods? If the EU wants to act as some sort of world environmental policemen, they must realise that such a move has consequences and collateral damage.


The EU limits IMPORTS it does not prohibit the production

Granted the intent is the same. If Indonesia has no one to sell palm oil to they have to reduce production. Palm oil production in Indonesia has been growing to meet growing worldwide demand (especially from Europe and India). By stunting imports from Indonesia the EU is trying to force Indonesia to scale back production.
 
Eiszeit
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Re: "Indonesian government to force Indonesian airlines to switch to Boeing"

Fri Aug 23, 2019 10:29 am

Polot wrote:
Eiszeit wrote:
majano wrote:
But why is it the EU's business to worry about the Indonesian oil production methods? If the EU wants to act as some sort of world environmental policemen, they must realise that such a move has consequences and collateral damage.


The EU limits IMPORTS it does not prohibit the production

Granted the intent is the same. If Indonesia has no one to sell palm oil to they have to reduce production. Palm oil production in Indonesia has been growing to meet growing worldwide demand (especially from Europe and India). By stunting imports from Indonesia the EU is trying to force Indonesia to scale back production.


Sure their intend is clear, I was more refering to the bold part.
 
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LaunchDetected
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Re: "Indonesian government to force Indonesian airlines to switch to Boeing"

Fri Aug 23, 2019 10:37 am

chiad wrote:
So ... Lion Air actually has a huge A320neo order since March 2013. I dont know why so few people know about it (or Wiki for that matter). Am I wrong about this order?
https://www.airbus.com/newsroom/press-r ... craft.html


This order is for Batik Air, as reported on the post you quoted. Batik Air is a subsidiary of Lion Air.
Caravelle lover
 
chiad
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Re: "Indonesian government to force Indonesian airlines to switch to Boeing"

Fri Aug 23, 2019 10:43 am

LaunchDetected wrote:
chiad wrote:
So ... Lion Air actually has a huge A320neo order since March 2013. I dont know why so few people know about it (or Wiki for that matter). Am I wrong about this order?
https://www.airbus.com/newsroom/press-r ... craft.html


This order is for Batik Air, as reported on the post you quoted. Batik Air is a subsidiary of Lion Air.


Ah ... I never got that!
Thanks for this valuable update.
 
JibberJim
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Re: "Indonesian government to force Indonesian airlines to switch to Boeing"

Fri Aug 23, 2019 10:55 am

Way off topic in many ways, but I thought Trans Fats were now banned in the US, and this is the main reason Palm Oil has increased so much, the properties of it make it a suitable substitute in a way that other vegetable oils are not - so soy or rape can't be substituted. So what has been the substitute in the US case - meat fats?
 
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SomebodyInTLS
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Re: "Indonesian government to force Indonesian airlines to switch to Boeing"

Fri Aug 23, 2019 3:03 pm

TurboJet707 wrote:
According to Dutch aviation news website Luchtvaartnieuws.nl, the Indonesian government wants Indonesian airlines to stop ordering airplanes from Airbus. The government is said to be angry about an EU decision to limit imports of Indonesian biodiesel from palm oil. By taking measures against the European aircraft manufacturer, the country wants to take revenge for that measure.

https://www.luchtvaartnieuws.nl/nieuws/ ... el-boeings
(Dutch only)

There is also talk of Indonesian airlines being asked to cancel outstanding Airbus orders and to convert them into orders for comparable Boeing products.

I am not sure Garuda and Lion will be happy to return to Boeing for large fleets of 737MAXes...


Kind of short-sighted... diesel is on the way out - in ten years' time no-one will be using it any more!
"As with most things related to aircraft design, it's all about the trade-offs and much more nuanced than A.net likes to make out."
 
WayexTDI
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Re: "Indonesian government to force Indonesian airlines to switch to Boeing"

Fri Aug 23, 2019 3:10 pm

SomebodyInTLS wrote:
TurboJet707 wrote:
According to Dutch aviation news website Luchtvaartnieuws.nl, the Indonesian government wants Indonesian airlines to stop ordering airplanes from Airbus. The government is said to be angry about an EU decision to limit imports of Indonesian biodiesel from palm oil. By taking measures against the European aircraft manufacturer, the country wants to take revenge for that measure.

https://www.luchtvaartnieuws.nl/nieuws/ ... el-boeings
(Dutch only)

There is also talk of Indonesian airlines being asked to cancel outstanding Airbus orders and to convert them into orders for comparable Boeing products.

I am not sure Garuda and Lion will be happy to return to Boeing for large fleets of 737MAXes...


Kind of short-sighted... diesel is on the way out - in ten years' time no-one will be using it any more!

Well, that's very optimistic for Diesel as a road fuel.
Remember that Jet Fuel is closely related to Diesel Fuel; and bio Jet Fuel could be created from palm oil as well.
 
 
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afterburner
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Re: "Indonesian government to force Indonesian airlines to switch to Boeing"

Fri Aug 23, 2019 3:25 pm

SomebodyInTLS wrote:
Kind of short-sighted... diesel is on the way out - in ten years' time no-one will be using it any more!

What kind of engines will power cargo lorries, trains, and vessels in ten years' time?
 
VSMUT
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Re: "Indonesian government to force Indonesian airlines to switch to Boeing"

Fri Aug 23, 2019 3:30 pm

Varsity1 wrote:
Aesma wrote:
So, does the US buy palm oil from Indonesia ?

From what I see currently the EU imports 2/3 more than it exports to Indonesia, so there is always the possibility of upping the ante.

Trade wars are all the rage, after all.


Yes, but not as much. Indonesia is incredibly far (physical distance) from the USA, so importing anything either way is rather expensive. New York City is 10,050 miles away straight line distance from Jakarta, never mind the numerous physical barriers.


It's not quite so simple. Europe may be closer, but it is still roughly 16.000 km for a ship to sail from Jakarta to Rotterdam, and "only" between 14.000 and 15.000 km to the US west coast.


ixam500 wrote:
How does a country expect to attract business and investment, when its government intervenes into decisions of PRIVATE businesses (such as Lion Air). If a country wants to experience strong economic growth, it has to provide legal certainty, since that is one of the most important factors for investors. Forcing PRIVATE airlines to order jets from a certain manufacturer unermines this aspect.


This might come as a surprise to you, but private doesn't mean the same in every country on this planet.

Indonesia is at the end of the day a massive market. 264 million inhabitants as of 2017. Not exactly hard to atract business and investment, even with constant state intervention.
 
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TurboJet707
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Re: "Indonesian government to force Indonesian airlines to switch to Boeing"

Fri Aug 23, 2019 3:31 pm

Theoretically, biofuels can be sustainable. A year or ten ago, biofuels were still very much en vogue and regarded as 'green', as (in theory) the plants absorb as much CO2 during their growth as is released when the oil that is produced out of it is burned. However, it was perhaps not realised back then that biofuel is not so 'green' when large areas of rain forest are cut to be replaced with plantations for palm oil or sugar cane. Having seen the enormous deforestations resulting from the increased demand for palm oil, the EU is now slowly turning away from this product. I think the EU has every right to impose higher import taxes for commodities that are deemed undesirable. This has nothing to do with the country of origin, but with the product itself and its effects to the global environment and climate.

I think the reaction of the Indonesian government is rather short-sighted and well, a bit childish. This behaviour is bad for the economic climate in Indonesia as it scares away companies that may want to invest (as ixam500 already wrote above). Airbus will survive this without problem, but it may be an economic blowback to Indonesia in the end.
 
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SomebodyInTLS
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Re: "Indonesian government to force Indonesian airlines to switch to Boeing"

Fri Aug 23, 2019 4:14 pm

afterburner wrote:
SomebodyInTLS wrote:
Kind of short-sighted... diesel is on the way out - in ten years' time no-one will be using it any more!

What kind of engines will power cargo lorries, trains, and vessels in ten years' time?


Okay, I'm using hyperbole. I should probably have stated it more like "In ten years' time private vehicles will mostly be sold with no diesel variant throughout the developed world. Diesel vehicle sales have recently seen a large drop globally as a result of the dieselgate scandal, growing awareness of its poor environmental credentials and the governmental promotion of electric vehicles together with stricter regulation of fossil-fueled vehicles causing most manufacturers to pivot toward electric development and manufacture. Following the legislature-enforced electrification of transport and the resulting shrinking of the fuel distribution infrastructure, diesel - along with other fossil fuels - will become less commonplace for the average driver to obtain, further reducing its attraction. Consequently, in the medium to long term there is likely to be a large fall in demand for commercial diesel production, so to invest now in producing and promoting biodiesel seems an unwise choice."

Better...?
"As with most things related to aircraft design, it's all about the trade-offs and much more nuanced than A.net likes to make out."
 
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LAX772LR
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Re: "Indonesian government to force Indonesian airlines to switch to Boeing"

Sat Aug 24, 2019 5:54 am

FredrikHAD wrote:
LAX772LR wrote:
FredrikHAD wrote:
Would Airbus lose money if the orders are cancelled or are they protected by the contracts?

Contracts are only as good as the mechanism through which they can be enforced.

Yes, enforcing the contract might become tricky, but for argument’s sake, do you have any idea what the contracts say (in general)

I wish. But no, I'm not privy to the specifics of their agreements.

Just taking a boilerplate perspective, they're of course going to have choice-of-law provisions, in a jurisdiction whose courts are empowered to enforce.

International law is however by consent of the governed, so on a very raw level: if one of the countries decided to defy that empowered entity's orders, there's really nothing that court can (directly) do. Governing bodies may choose to impose sanctions and take other actions against such rogue activities though.
I myself, suspect a more prosaic motive... ~Thranduil

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