Arranging Expectations on Indonesia-Airbus Cooperation
The signing of the Joint Declaration of Intent (JDI) between the Ministry of National Development Planning/Bappenas and Airbus Asia-Pacific in Jakarta on 5 May 2026 must be approached with caution and not overly applauded. This is because much background information unknown to the public behind the signing will influence the implementation of the JDI.
In the agreement signed at the Ministry of National Development Planning/Bappenas office, both parties agreed to explore cooperation opportunities encompassing the strengthening of domestic industry capacity as well as the development of the maintenance, repair, and overhaul (MRO) sector for various Airbus product lines.
For Indonesia, the JDI with Airbus is expected to help implement the Roadmap for the Development of the Indonesian Aerospace Industry Ecosystem 2022-2045, which was issued by the Ministry of National Development Planning/Bappenas a few years ago.
The role of Airbus SE’s predecessors in advancing Indonesia’s aerospace industry is indisputable, as CASA, Aerospatiale, and Messerschmitt-Bölkow-Blohm were the three European aerospace firms willing to assist Indonesia in building its aerospace industry, particularly aircraft manufacturing. Among the Western aerospace companies lobbied by B.J. Habibie in the mid-1970s, only these three were willing to extend a hand to Indonesia.
Even now, some aerospace products previously produced under licence by IPTN continue to generate revenue for PT Dirgantara Indonesia. PT Dirgantara Indonesia has failed to produce new revenue-generating products after abandoning the IPTN name, with new product development progressing very slowly and not yet entering the increasingly competitive market.
After a series of consolidations in the European aerospace and defence industry between 1989 and the early 2000s, CASA, Aerospatiale, and Messerschmitt-Bölkow-Blohm merged into EADS, the parent of Airbus until 2015. In 2015, EADS changed its name to Airbus Group SE, and in 2017, Airbus Group SE merged with Airbus S.A.S (formerly Airbus Industrie GIE) to become Airbus SE.
If in the IPTN era the cooperation included licensed aircraft production and aerostructures, in the PT Dirgantara Indonesia era the partnership focuses more on aerostructures and sales of Airbus SE products, particularly Airbus Defence and Space (C295) and Airbus Helicopters (H225M and H145).
Additionally, Airbus Defence and Space has relocated the global C212 production facility to Bandung and plans to do the same for the CN235, particularly regarding autonomous rights, if Indonesia procures an additional four A400M aircraft.
Airbus Asia-Pacific and PT Dirgantara Indonesia signed a Memorandum of Understanding (MoU) on 7 September 2022 regarding the development of aerostructure and MRO business, claimed to have a business value of US$500 million over the next 10 years for aerostructures.
Empirical facts currently show that there has been no follow-up on that MoU by the Indonesian aircraft manufacturer with Boeing’s rival, particularly in aerostructure efforts, caused by PT Dirgantara Indonesia lacking funds to purchase new CNC machines.
Without procuring new CNC machines, it is impossible for Airbus SE to increase aerostructure production orders to the Bandung-based company. Thus, the US$500 million business opportunity until 2032 evaporates just like that, while local private companies continue to produce aerostructures for commercial aircraft made by Airbus SE through Spirit AeroSystems, which has now been dissolved.
Regarding the JDI between the Ministry of National Development Planning/Bappenas and Airbus Asia Pacific, several important matters need attention. First, the character of the JDI. The JDI is more political in nature for both parties, but its implementation cannot be carried out at the Ministry of National Development Planning/Bappenas level.
Airbus Asia-Pacific must translate the JDI into business and industry agreements with several Indonesian firms operating in the aerospace sector. Moreover, the implementation of the JDI by Airbus Asia-Pacific must first obtain approval from Airbus SE, such as Airbus in Spain, France, or Germany, as business decisions are made by the European headquarters and not the Singapore office.
Second, Indonesia’s position in Airbus SE’s business map. Indonesia is not in Airbus SE’s business map for developing the European multinational manufacturer’s operations in the Asia-Pacific region due to this country’s weak competitiveness in the global aerospace industry.
After establishing a Final Assembly Line (FAL) facility in China for the A320 family, Airbus’s focus is on setting up a similar facility in India for the C295 and H125. Airbus SE has no plans to date for major investments in Indonesia, such as making Indonesia a C295 and H225M FAL hub for Southeast Asia and the Pacific.
Third, implementation challenges. As mentioned, the implementation of the JDI will be purely based on business and industry agreements and not driven by political factors. Among the challenges faced by Indonesia in implementing the JDI is the financial capacity of several Indonesian aerospace companies, both in manufacturing and MRO, to improve capabilities before further cooperation with Airbus SE is realised.
In any case, it is impossible to increase production capacity, including human resources, without support from own funds or injections from the Indonesia Daya Anagata Nusantara Management Agency (Danantara Indonesia) for state-owned enterprises.
Fourth, the application of compliance and