Brendan Nelson, senior vice president of The Boeing Company and president of Boeing Global, spoke with The Jakarta Post’s Vincent Fabian Thomas and Ruth Dea Juwita on Wednesday about the aviation market outlook, current challenges and the company’s plans in the region.

Question: Many Indonesian airlines are struggling to recover their fleets amid rising demand for air travel. How does Boeing see this phenomenon?

Answer: This is a problem that airlines have been facing throughout the world and to varying degrees. They offer a number of factors. One, not a lot of airlines came out of the pandemic financially unstressed and able to invest in their aircrafts to get them certified for flying again. Two, getting staff has been a major issue. Also, three, the supply chain is constrained globally.

As for Indonesia, we have our teams always embedded with Indonesian customers to support. Most of their airplanes are mostly back in there and are flying. Needless to say, we’ll do anything we possibly can to support the airlines to get their planes flying.

Has there been a rapid increase in demand for aircraft from airline companies to fulfill this fleet recovery?

One thing that analysts have consistently got wrong is debating when flights will return to normal. You’ll recall travel was very low in 2020 and 2021 as result of the pandemic. The forecasts were much more modest about how quickly the demand would return.

In Indonesia, we expect demand to be back to pre-COVID or 2019 levels in first quarter next year and internationally by the third quarter. Demand is returning very quickly.

We would like to [catch up with demand]. We've been working very hard to mitigate the challenges in our supply chains and to improve their efficiency.

We're progressively moving our production rate up, but we're not going to drive our production rate to the standard that undermines safety and quality, nor can we put excessive strain on our supply chain.

For Boeing’s production capacity, how much is it now, compared to before the pandemic?

I think our rates of production were higher before the pandemic. But it is a very complex business. Decisions must be made long in advance on these multimillion-dollar platforms. There is a multiple-complexity investment that has to be made.

What are the challenges for producers in keeping up with demand?

The challenges were installing designs and installing model manufacturing equipment. We also have supply chain issues, tensions all through this year and probably the next year as well. All these wishes that supply chain constraints would instantly be resolved.

We’re in the most complex operating environment that we’ve ever experienced. We’ve got geopolitical uncertainty. We’ve got energy challenges, major energy transitions, supply chain constraints and the labor market. At the same time, it’s [a time of] extremely high demand for commercial aviation services.

How’s the demand for sustainable aviation fuel (SAF)?

The airlines have been working on sustainability. They want to make sure they are green, such as by having emissions as low as they can be from the aircraft they buy.

Passengers are also increasingly concerned. The airlines have been very conscious of reassuring their passengers that they’re flying the most efficient aircraft that they possibly can.

We’ve been working hard with the SAF. For ASEAN, we are looking at what feedstock we can get in the region. We certainly don’t want to impact food, nor use palm oil or anything that is environmentally damaging in any way.

The SAF produced today is about 2 percent of the demand that has to be met. The government and the industry have to work together to rapidly increase the production.

We can put SAF in our airplanes today up to about 50 percent. By 2030, our new planes will be able to run on 100 percent SAF.

At the moment, the cost of SAF is about three times that of kerosene fuels. But the more we can produce, the lower the cost will become.

What are Boeing’s plans for ASEAN?

ASEAN is an incredibly important market and they are going to need over 4,200 additional aircraft in the next 20 years, where there are currently 1,600 aircraft in the market. We hope that more of our planes will be flying in the region.

For us in the aviation sector, we have an interest in engaging and supporting ASEAN through new technologies, to improve the efficiency of aircraft operations and sustainability. We face a common environmental challenge, and we're going to have to find common solutions.

We also see this as an important market for security as well as for our military hardware, as nations get more prosperous and have more ability to afford significant military purchases.

There is also the geopolitical environment in the world, unfortunately. Hopefully, this won't stay.

But, as there's a lot of tension in the world, from Myanmar, to Ukraine, to Taiwan. They may want to make sure that their nations' sovereignty is protected, and Boeing can be a part of that solution.

Are there any plans from Boeing to build a manufacturing facility in Indonesia?

At this stage we don’t have any plan, and that’s one thing that we are exploring. We envision globalizing the company. We certainly explore opportunities to work in research and technology and grow our supply base, so we have more supplies which come from Indonesia.

In the longer term, we may find opportunities to support manufacturing components for our aircraft here.

Some Boeing suppliers are already based in Indonesia. They produce things such as composite linings and wing components for commercial aircraft.

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