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China, Merpati and the future of PTDI

singapore-airshow-2012The Singapore Airshow, which is known as a major competitor to the Paris and Farnborough Airshows, has just concluded. In a presentation at the show, state-run PT Merpati Nusantara Airlines (MNA), aircraft manufacturer PT Dirgantara Indonesia (PTDI), AVIC International Holding Corporation and the Aircraft Corporation of China signed a Memorandum of Understanding (MoU) regarding the procurement of 40 ARJ – 700 and Y-12 aircraft with 100-seat and 17-seat capacities, respectively.

Within that MoU, an interesting aspect — apart from it being attended by State-Owned Enterprises Minister Dahlan Iskan — was that the process of the procurement of the Chinese aircraft actually involved PTDI in the set-off framework. It is expected that around 30 percent of the manufacturing process will be done at PTDI.

This will have very influential impact on the technological development of this country and significantly differs from the past pattern of purchasing hundreds of aircraft from the United States, which have not involved PTDI at all.

It also needs to be noted that the purchase is entirely different from the previous purchase of  Chinese MA-60s. This time the purchase will be made via capital funding that is 100 percent sourced from the Bank of China.

Through this purchase scheme, it seems the government has had a hand in helping resurrect PTDI as an aircraft manufacturer. It is reported that PTDI’s C-295 and N-219 projects are going to be continued.
This, along with the offset scheme with China, suddenly appears like the bearer of “good news from the sky” for the civil aviation industry and the development of the domestic defense industry, with both preparing to enter the global market.

On the other hand, the feudalistic mindset has been a very effective barrier in blocking the information flow to the “Big Boss”. Marvelous ideas should never turn into wishful thinking. Ideas regarding huge projects should be brought back “down to earth” in order to see the reality in PTDI, which is very difficult news to deliver to the desk of the leader.

From existing facts and conditions, PTDI still has a lot of homework to do and issues that need to be resolved before they can set forth to work on projects at the level of C-295 or N-219 or the MNA aircraft from China.
The first issue is that PTDI is said to be facing obstacles and troubles in handling the serious problems regarding the company’s finances in relation to the management of employees’ superannuation funds.
Besides that, PTDI is still having problems with the process of developing future human resources, especially when it comes to productivity and design capabilities in aircraft development. Most of the human resources in this significant segment of manufacturing are over 50 years of age and it will require quite some time to bring new blood up to speed.

Another important issue is how to establish steps to handle the perception of an aviation manufacturer which cannot stand by itself. The memorable Dr Said Jenie said that there were three fundamental and absolutely important pillars in creating a national aviation industry under the supervision of the government as the main driver. Those three pillars are: the Air Force, Aircraft Manufacturer and the Universities.

If there is no established long-term strategic planning with the support of consistent financial backup, then all work done will be wasted. There are long-term military aircraft projects which should be integrated with the civil aviation transportation projects and be supported by an adequate research and development program. Because in essence, in order to compete on the global stage, strong foundations in the domestic market are important. Otherwise, those projects will only be part of an imaginary plan that is impossible to achieve.

After a glamorous series of events during the past Indonesian Air Show, it must be admitted that PTDI actually still possesses the potential to be resurrected. This is conditional on solving its current problems and resolving the aforementioned issues before it can handle huge projects such as the C-295 and N-219 as well as the involvement with MNA and the Chinese. This all depends on serious attention being paid by the government.

There is a high expectation that Indonesian investment in the aviation sector will not stop at simply having adequate human resources but “spreading out” (contributing and working) in almost all aircraft manufacturing worldwide. Despite all these matters, a big thumbs-up should be given to PTDI as well as the government, which has at last sent out the right signals in redeveloping PT Dirgantara Indonesia — which is after all the Indonesian aerospace industry.

Chappy Hakim,
Jakarta | Fri, 03/16/2012 10:39 AM (The Jakarta Post)
The writer is Chairman, CSE Aviation.

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