Boeing is concerned about the ability of Indonesia to pay for the F-15EX Eagle II fighter jets

Indonesia’s Defense Minister Prabowo Subianto said last month during a visit to the US that the country wants to pay for the F-15EX deal in installments.

Bloomberg reports that Boeing “is concerned about the ability of” Indonesia to finance the deal to buy 36 new F-15ID fighter jets.

The Tentara Nasional Indonesia – Angkatan Udara (TNI-AU, Indonesian Air Force) chief Air Marshal Fajar Prasetyo said on Feb. 18, 2021 that his country would have purchased F-15EX jets from Boeing and Rafale fighter aircraft from Dassault.

Hence the F-15ID would be a version of the F-15EX Eagle II specifically tailored for TNI-AU.

But now people familiar with the matter, who asked not to be identified because the deliberations are confidential, said that executives from Boeing flew to Jakarta last week to discuss the transaction with Indonesian officials on the sidelines of an annual defense exhibition.

Boeing is concerned about the ability of Southeast Asia’s biggest economy to finance the jets, with Indonesia insisting on paying in installments, said the people. The meetings ended without a conclusive outcome, meaning plans to sign the deal before the end of this year will likely be delayed, they said.

Geopolitically, the order is vital to US national interests in that it would reinforce one of its key partners in the region. As already reported, the US State Department made a determination on Feb. 10, 2022 approving a possible Foreign Military Sale to the Government of Indonesia of F-15ID aircraft. The sale package included MS-110 Recce Pods and AN/ASG-34 Infrared Search and Track equipment.

On the same day Indonesia has signed a contract to buy 42 Dassault Rafale fighters.

A Boeing spokesperson said it was continuing to have “meaningful and productive conversations with senior members” of the Indonesian Air Force and the Ministry of Defense, and referred Bloomberg News to the US and Indonesian governments for further comment. Indonesia’s Defense Ministry didn’t immediately respond to a request for comment.

Late last month, Indonesia’s Defense Minister Prabowo Subianto said that negotiations with Boeing are ongoing. He also hinted at challenges around financing.

“We clearly asked that we must be able to buy in terms of paying in installments; we can’t do it all at once,” Prabowo said at a media briefing with local reporters at the time. “The government always prioritizes economic development and so on.”

Indonesia originally elected the Su-35 to replace TNI-AU aging F-5E Tiger II fleet: in August 2017 the country announced a barter deal under which Jakarta was planning to purchase 11 Sukhoi Su-35 jets in exchange for Russia buying goods such as rubber, crude palm oil, coffee, tea, furniture and spices.

The Su-35 competed with several western fighters including Eurofighter Typhoon, Dassault Rafale, F-16V Viper, and Saab JAS 39 Gripen.

But in March 2020 it was reported that Washington warned Jakarta that buying the Russian fighters will risk the South East Asian country being penalized under the Countering America’s Adversaries Through Sanctions Act. For this reason the US offered the F-16 to Indonesia in return but Jakarta is more keen on buying the F-35 instead.

Then it was reported that in a September 2020 letter Austria’s Defense Minister Klaudia Tanner responded to her Indonesian counterpart Prabowo Subianto initial letter dated Jul. 10, 2020 where he expressed interest in buying Austrian Eurofighter Typhoon fighter jets.

For Indonesia buying used weapons from other countries, such as the Austrian Typhoons, is an option to meet Minimum Essential Force targets, while the second is to buy all its military hardware brand new for higher quality.

For Indonesia, the F-15 purchase is part of efforts to modernize its military. But a pandemic-induced fiscal squeeze coupled with soaring inflation as well as the push to complete infrastructure projects mean the military has to compete with other portfolios for the country’s financial resources.

Photo credit: U.S. Air Force