AeroGenie — Your Intelligent Copilot.
Trending
Categories
Indonesia Eliminates Import Duties on Aircraft Spare Parts

Indonesia Eliminates Import Duties on Aircraft Spare Parts
Policy Announcement and Industry Context
Jakarta has introduced a significant policy change by eliminating import duties on aircraft spare parts, aiming to bolster the nation’s aviation sector amid ongoing global challenges. The decision comes in response to the turbulence caused by the Iran conflict and the sharp rise in oil prices, which have recently surpassed $110 per barrel. Coordinating Minister for Economic Affairs Airlangga Hartarto announced the new measure during a press briefing in Jakarta, emphasizing the government’s commitment to sustaining and enhancing Indonesia’s aviation industry. He highlighted that the zero import duty policy is designed to reduce operational costs for airlines and strengthen the country’s maintenance, repair, and operations (MRO) sector.
Indonesia’s aviation industry is heavily dependent on imported components, with the Indonesia Aircraft Maintenance Services Association (IAMSA) estimating that 99% of airplane parts are sourced from abroad. Freddy Fransiscus, IAMSA’s secretary-general, noted that while maintenance work relies entirely on imported materials, the workforce remains domestically based. This reliance underscores the strategic importance of the government’s decision to remove import duties, which previously generated approximately Rp 500 billion ($29.3 million) in revenue in 2025.
Economic Impact and Industry Implications
The removal of import duties is expected to significantly stimulate the MRO industry, with projections indicating an annual economic boost of $700 million and an additional $1.49 billion contribution to Indonesia’s gross domestic product (GDP). The policy is also anticipated to create around 1,000 direct jobs and more than 2,700 indirect positions, offering a meaningful opportunity to alleviate unemployment pressures within the country.
However, the policy shift may intensify competition for local manufacturers, as foreign suppliers could leverage the duty exemption to offer more competitive pricing and enhanced services. This dynamic may result in a redistribution of market share favoring international suppliers, posing challenges for domestic businesses. To remain competitive, local manufacturers may need to improve product quality and service standards. Conversely, the policy could stimulate growth in domestic repair and maintenance services, contributing to a more resilient and competitive aviation sector.
Additional Measures and Future Outlook
Alongside the import duty exemption, the government has introduced a temporary waiver of value-added tax (VAT) on economy class tickets for domestic flights. This measure will be in effect for two months and is subject to review depending on developments related to the ongoing conflict.
Indonesia’s imports of aircraft, spacecraft, and related parts have surged dramatically, reaching $578.9 million in January-February 2026—a nearly ninefold increase compared to $59.7 million during the same period the previous year, according to the Trade Ministry. To facilitate the implementation of the zero import duty policy, the government plans to issue technical regulations in the coming weeks. These steps reflect Indonesia’s strategic efforts to navigate global aviation challenges and reinforce its position as a key regional aviation hub.

Boeing Dreamliner Retired After 13 Flight Hours Amid Supply Chain Issues

Air Canada Introduces Lie-Flat Business Class on A321XLR Narrowbody

What 170 AI Job Listings Reveal About Who Is Actually Building in Travel

The Impact of AI and IoT on Kuwait’s Aviation Sector

Vertical Aerospace Conducts Piloted Electric Air Taxi Transition Flight

Boeing Surpasses Airbus in Deliveries Amid Ongoing Recovery Challenges

Solomon Airlines Suspends DHC-8-100 Operations for Maintenance

American Airlines Flight Delayed by Bee Swarm on Engine

Bangladesh Expresses Interest in Leasing Boeing Aircraft
