Trump's trade deal pushes Garuda to learn to love 737 Max again
Trump announced in a social media post on Tuesday (Jul 15) that Indonesia will order 50 aircraft, including 'many' of Boeing's larger 777 planes. While Trump did not disclose a buyer, Garuda chief executive officer Wamildan Tsani Panjaitan had previously said he's in talks to buy 50 to 75 Boeing aircraft, including 737 Max and 787-9 Dreamliner models.
The accord points to the intertwined political and economic interests whenever Trump negotiates with foreign leaders. The US President has previously announced aircraft purchases while visiting countries including Qatar, or when he's hammered out trade agreements with the likes of Vietnam or the UK. In Indonesia's case, Trump said he got the deal over the line in direct negotiations with President Prabowo Subianto during a phone call.
The dilemma for Boeing is how to restore or expand the existing 49-jet Max order without leaving Garuda in a financial and strategic bind. The airline is already having trouble keeping its existing fleet airworthy, with at least 15 jets grounded as recently as May, as it struggles to make maintenance payments.
At the same time, the state-owned carrier, alongside the Danantara sovereign wealth fund that owns Garuda, is under pressure to move quickly with an announcement to please Trump, according to people familiar with the discussions. The airline and Boeing do not yet have an agreement on the models and quantities that would typically be in such an announcement, said the sources, who asked not to be identified discussing private matters.
Boeing referred any questions to Garuda. The airline and its owner did not immediately respond to requests for comment.
A NEWSLETTER FOR YOU
Friday, 8.30 am Asean Business
Business insights centering on South-east Asia's fast-growing economies.
Sign Up
Sign Up
On its own, Garuda does not even have the funds to finance the earlier 737 Max agreement, the sources said. That may prompt Danantara to step in by providing some sort of guarantee or a shareholder loan similar to the US$405 million it put forward last month, the sources said.
Garuda may receive between US$800 million and US$1.2 billion more from Danantara to assist with payments to maintenance and leasing companies, they added.
As a result, any plane deal could be structured as a purchase while the parties discuss financing options with Danantara and lessors for a later stage, the sources said. But given the weighty political implications, Garuda may feel pressure to agree to a deal under terms it does not necessarily favour and with jets it does not actually need, one of the sources said.
Trump is known to combine state visits with tariff announcements to flex his deal-making skills. During his tour of the Middle East, he announced an aircraft accord in every country he visited, including a record plane purchase by Qatar Airways.
Not all of those transactions are necessarily what they appear to be. Trump has previously announced inaccurate sizes for accords, wrong numbers of purchased jets or has mixed up aircraft types. He's also presented old agreements as new ones. Some deals that were announced during his first term meanwhile, have since fallen through.
At this point, Garuda only operates eight older 777-300 aircraft, raising the question of why the airline would want to buy Boeing's yet-to-be-certified successor in large quantities, as Trump has suggested. The earlier 737 Max order still sits on Boeing's books under a special US accounting category for at-risk deals that are not likely to materialise, the sources said.
The state-owned carrier sank back into the red in 2024 after an almost US$10 billion debt restructuring failed to revive its fortunes. That performance is in contrast to its peers in the region that are profitable as they benefit from a rebound in travel demand after the pandemic. BLOOMBERG
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles

Straits Times
19 minutes ago
- Straits Times
Trump and Starmer to meet in Scotland with trade and Gaza on agenda
Find out what's new on ST website and app. Mr Starmer (right) had hoped to negotiate a drop in US steel and aluminium tariffs as part of the talks. EDINBURGH/TURNBERRY, Scotland - US President Donald Trump will host British Prime Minister Keir Starmer at his golf resort in western Scotland on July 28 for talks ranging from their recent bilateral trade deal to the worsening hunger crisis in Gaza, the two governments said. Mr Trump, riding high after announcing a huge trade agreement with the European Union late on July 27, said he expected Mr Starmer would also be pleased. 'The prime minister of the UK, while he's not involved in this, will be very happy because you know, there's a certain unity that's been brought there, too,' Mr Trump said. 'He's going to be very happy to see what we did.' UK wants to discuss steel tariffs Mr Starmer had hoped to negotiate a drop in US steel and aluminium tariffs as part of the talks, but Mr Trump on July 28 ruled out any changes in the 50 per cent steel and aluminium duties for the EU, and has said the trade deal with Britain is 'concluded'. British business and trade minister Jonathan Reynolds told the BBC the talks with Mr Trump offered Britain a good chance to advance its arguments, but he did not expect announcements on the issue on July 28. Mr Trump and Mr Starmer were expected to meet at noon local time at Mr Trump's luxury golf resort in Turnberry, on Scotland's west coast, before travelling on together later to a second sprawling estate owned by Mr Trump in the east, near Aberdeen. Hundreds of police officers were guarding the perimeter of the Turnberry course and the beach that flanks it, with a helicopter hovering overhead, although there was no sign of protesters outside the course. Top stories Swipe. Select. Stay informed. Singapore Tanjong Katong sinkhole backfilled; road to be repaved after LTA tests Asia Gunman kills 5 security guards near Bangkok's Chatuchak market before taking own life Singapore HPB looking for vaping, smoking counselling services for up to 175 secondary school students Asia Cambodia says immediate ceasefire is purpose of talks; Thailand questions its sincerity Singapore Jail for former pre-school teacher who tripped toddler repeatedly, causing child to bleed from nose Singapore Police statements by doctor in fake vaccine case involving Iris Koh allowed in court: Judge Singapore Woman allegedly linked to case involving pre-schooler's sexual assault given stern warning Singapore Singapore lion dance troupe retains title at Genting World championship Mr Starmer was arriving from Switzerland, where England on July 27 won the women's European soccer championship final. Casting a shadow over their visit has been the deepening crisis in the war-torn Gaza enclave, where images of starving Palestinians have alarmed the world. British cabinet recalled Mr Starmer has recalled his ministers from their summer recess for a cabinet meeting, a government source said on July 28, most likely to discuss the situation in Gaza as pressure grows at home and abroad to recognise a Palestinian state. On July 25, he said Britain would recognise a Palestinian state only as part of a negotiated peace deal, disappointing many in his Labour Party who want him to follow France in taking swifter action. Mr Trump on July 25 dismissed French President Emmanuel Macron's plan to recognise a Palestinian state , an intention that also drew strong condemnation from Israel, after similar moves from Spain, Norway and Ireland in 2024. Mr Trump said that while the US would increase its aid to Gaza, it wanted others to join the effort. Ukraine was also on the agenda for talks with Mr Starmer. Dozens of Gazans have died of malnutrition in recent weeks , according to the Health Ministry in the Hamas-run enclave, with aid groups warning of mass hunger. The war began on Oct 7, 2023, when Hamas-led fighters stormed southern Israel, killing 1,200 people, mostly civilians, and taking 251 hostages back to Gaza, according to Israeli tallies. Since then, Israel's offensive has killed nearly 60,000 people in Gaza, mostly civilians, according to Gaza health officials. It has reduced much of the enclave to ruins and displaced nearly the entire population of over 2 million. REUTERS


CNA
an hour ago
- CNA
Dollar strengthens after US and EU agree to tariff deal
TOKYO/LONDON :The dollar rose against major peers on Monday after the United States and the EU struck a framework trade pact, the latest in a flurry of deals to avert a global trade war, with investors also looking to this week's U.S. and Japanese central bank meetings. Meeting in Scotland on Sunday, U.S. President Donald Trump and European Commission President Ursula von der Leyen said the deal provided for an import tariff of 15 per cent on EU goods, half the rate Trump had threatened from August 1. That follows last week's U.S. agreement with Japan, while top U.S. and Chinese economic officials will resume talks in Stockholm on Monday aiming to extend a truce by three months and keep sharply higher tariffs at bay. The euro was last at $1.1693, down 0.4 per cent on the day, reversing an initial knee-jerk rise in Asia trade as investors' focus shifted to what an easing in global trade tensions meant for the dollar overall. "The mood music on U.S. trade negotiations has been a little brighter following agreements with Japan and the EU," said Paul Mackel, global head of FX research at HSBC. "If more 'trade deals' are reached, this could help to reduce this source of policy uncertainty that has weighed against the dollar, at least for now. It could also see other factors such as relative yields becoming more influential." The dollar tumbled sharply earlier this year, particularly against the euro, as fears dramatically higher tariffs on trade with most of its major partners would hurt the U.S. economy caused investors to consider shifting out of U.S. assets. Normally the gap between yields on government bonds is a major factor for currency moves, but at present the euro is meaningfully higher than the gap between U.S. and euro zone yields would imply. The euro was also last down slightly on the yen and sterling, having hit a one-year high on the Japanese currency, and a two-year high on sterling at the start of trade. The dollar was stronger elsewhere, up 0.15 per cent on the yen at 147.83, while the pound was down 0.13 per cent at $1.3428. As concerns subside about the economic fallout from punishing tariffs, investor attention is shifting to corporate earnings and central bank meetings in the United States and Japan in the next few days. Both the Fed and the Bank of Japan are expected to hold rates steady at policy meetings this week, but traders will watch subsequent comments to gauge the timing of the next moves. Investors will also be watching to see Trump's reaction to the Fed's decision. The U.S. President has been putting the Fed under heavy pressure to make significant rate cuts, and Trump appeared close to trying to fire Powell last week, but backed off with a nod to the market disruption that would likely follow. In cryptocurrencies, ethereum jumped 1.7 per cent and reached as high as $3,940.25, the most since December 2024.
Business Times
an hour ago
- Business Times
Thailand and Cambodia begin truce talks as fighting drags on
[KUALA LUMPUR] Thailand and Cambodia's leaders opened peace talks Monday (Jul 28) in Malaysia, seeking a ceasefire after five days of combat along their jungle-clad frontier that has killed at least 35 people. More than 200,000 people have fled as the two sides fired artillery, rockets and guns in a battle over the long-disputed area, which is home to a smattering of ancient temples. The flare-up is the deadliest since violence raged from 2008-2011 over the territory, which is claimed by both sides because of a vague demarcation made by Cambodia's French colonial administrators in 1907. Hours ahead of the talks, an AFP journalist in the Cambodian city of Samraong – 17 kilometres from the fraught frontier – reported hearing a steady drumbeat of up to 10 blasts a minute. US President Donald Trump – who both nations are courting for trade deals to avert the threat of eye-watering tariffs – intervened over the weekend, and said both sides had agreed to 'quickly work out' a truce. Thai acting Prime Minister Phumtham Wechayachai and Cambodia's Prime Minister Hun Manet began their talks in the administrative capital Putrajaya around 3.15pm. A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up They met at the residence of Malaysian leader Anwar Ibrahim, serving chair of the Asean bloc of which Thailand and Cambodia are both members, who earlier told media he would focus on an 'immediate ceasefire'. Washington's top diplomat Marco Rubio said State Department officials were on the ground in Malaysia to assist the 'peace efforts' while Cambodia said a delegation from its close ally China would also attend. But ahead of the summit, Thailand and Cambodia traded fresh fire and barbed accusations. Cambodia's defence ministry spokeswoman Maly Socheata said it was 'the fifth day that Thailand has invaded Cambodia's territory with heavy weapons and with the deployment of a lot of troops'. As he departed Bangkok airport, Phumtham told reporters he did not believe Cambodia was 'acting in good faith' and called on the country 'to demonstrate genuine intent' in the meeting. In Thailand's Surin city – 30 kilometres from the border and a hub of evacuees fleeing the fighting – 58-year-old Lamduan Chuenjit shared her leader's scepticism. 'I hope the negotiation goes well today and ends with a ceasefire,' the cleaner told AFP while sweeping a shopfront. 'But I do wonder how trustworthy Cambodia is.' On the eve of the talks, Thailand's military said Cambodian snipers were camped in one of the contested temples, and accused Phnom Penh of surging troops along the border and hammering Thai territory with rockets. It said there was fighting at seven areas in the rural region, marked by a ridge of hills surrounded by wild jungle and fields where locals farm rubber and rice. 'The situation remains highly tense, and it is anticipated that Cambodia may be preparing for a major military operation prior to entering negotiations,' the Thai military statement read. Thai King Maha Vajiralongkorn marked his 73rd birthday on Monday, but a notice in the country's Royal Gazette said his public celebrations scheduled for Bangkok's Grand Palace have been cancelled amid the strife. Trump has threatened both countries with high levies in his global tariff blitz unless they agree to independent trade deals – but said he would 'look forward' to signing them once 'peace is at hand'. Each side has already agreed to a truce in principle, while accusing the other of undermining peace efforts and trading allegations about the use of cluster bombs and targeting of hospitals. Thailand says eight of its soldiers and 14 civilians have been killed, while Cambodia has confirmed eight civilian and five military deaths. The Thai military said it had returned the bodies of 12 Cambodian soldiers killed in combat. More than 138,000 people have fled Thailand's border regions, while around 80,000 have been driven from their homes in Cambodia. With the skirmish inflaming nationalist sentiments, Thailand warned its citizens to 'refrain from any kind of violence, whether in speech or action' against Cambodian migrants living in the country. AFP