Boeing Ready to Move Forward with US-Indonesia Osprey Deal

20 Juli 2020

MV-22 Osprey tilt-rotor aircraft (photo : Boeing)

Defense and aerospace giant Boeing said it was looking forward to working closely with the United States and Indonesia to finalize a possible US$2 billion deal for Osprey tilt-rotor aircraft.

 “Congressional notification is an important step in the United States’ Foreign Military Sales (FMS) process, so we’re pleased that a potential V-22 acquisition by Indonesia has entered this phase,” Boeing said in a statement to The Jakarta Post dated July 15.

“Currently, the US military is buying the V-22 under the Multiyear Procurement III (MYP III) contract. Completion of this sale in 2020 will allow Indonesia to receive the MYP III pricing already negotiated by the US Government for its aircraft.”

Indonesian Chief Army with MV-22 Osprey (photo : digitalindonesianews)

An agency of the US Defense Department, the Defense Security Cooperation Agency (DSCA) announced on July 6 that the US State Department had “made a determination approving a possible Foreign Military Sale to the Government of Indonesia of eight (8) MV-22 Block C Osprey aircraft and related equipment for an estimated cost of $2 billion”. 

“The Defense Security Cooperation Agency delivered the required certification notifying Congress of this possible sale today,” the DSCA said in a statement dated July 6.

After the DSCA announced the US State Department’s approval, many in the Indonesian defense establishment said they were unaware of any plan to acquire Osprey. The DSCA announcement of a FMS, however, can only be made after a letter of request is sent by a potential buyer.

In a FMS, a potential buyer negotiates with the US government instead of with defense contractors. One advantage of this method is that the purchase can be included in a US military procurement program that is already underway, often reducing the price for the buyer and increasing interoperability with the US.

Comparison Osprey with Chinook (infographic : Akurat)

Another path to acquiring US primary weapons systems (alutsista) is through Direct Commercial Sales, in which a foreign buyer negotiates directly with a defense contractor.

In its statement, Boeing identified the Indonesian Army as the Osprey’s potential user.

“The V-22 would enable the Indonesian Army to reach those areas and rapidly respond to crises across Indonesia and the region at large with its own organic aviation assets,” the company said.

“Bell Boeing has been in ongoing discussions with the Indonesian government and Indonesian companies to develop the best possible approach to address requirements pertaining to this Foreign Military Sale in support of TNI-AD and local industry.”


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