Indonesian government wants airlines to stop signing new aircraft deals with Airbus

Jakarta, Indonesia - The government of Indonesia wants Indonesian airline operators to stop ordering new planes from Airbus and to cancel their existing orders.

On March 13, after years of controversy and delay, the European Union labeled biofuel from palm oil as unsustainable and banned subsidies for its production.

A division in the European Commission that is responsible for the environmental issues concluded that the cultivation of palm oil results in excessive deforestation.

Indonesia and Malaysia are the major palm oil exporters in Asia, and they are not happy with the Commission's decision.

Now the Indonesian government wants to respond the European Union by forcing the country's airlines to cancel their existing aircraft orders with Airbus and stop placing new orders.

Garuda Indonesia, the flag carrier of the country, revealed during its quarterly meeting that it signed a letter of intent with the European aircraft manufacturer on June 17 this year for the acquisition of four Airbus A330-800.

If finalized, Airbus will deliver four A330-800 to Garuda Indonesia from 2021 to 2022.

It appears to be the most recent order for Airbus's jets from an Indonesian carrier. The question is now whether the state-owned airline will cancel this order or after the call of the Indonesian government for the airlines of the country.

Garuda Indonesia already has fourteen larger A330-900 on order directly from Airbus.

The A330-800 is the smaller variant of the Airbus's A330neo family. The aircraft has been suffering from lack of demand since it was first introduced to the market last year, and the order from Garuda Indonesia would be another important milestone for the manufacturer to increase the presence of the aircraft in the fleets of world's major airline operators.

The A330-800 has so far received orders for only ten copies from Kuwait Airways (8) and Uganda Airlines (2).

In addition to Garuda Indonesia, Lion Air has eight A330-900, Citilink has two A330-900 and 27 A320neo, and Batik Air has 113 A320neo and 65 A321neo on order from the European aircraft manufacturer.