Development of Indonesia’s Aviation Market

BACKGROUND

From “Sabang ‘till Merauke” is the name of a song dedicated to Indonesia’s many islands and its diversity. Its numerous chain of islands contained in the thirty-two thousand miles dividing two oceans, the Pacific Ocean and the Indian Ocean. Despite this diversity, Indonesia today has a common bond that united them all into one nation, one language, and one people. However, the people of Indonesia have been able to overcome their differences.

Due to poor land infrastructure, aviation is vital to Indonesia’s economic growth and they are the largest aviation market in the ASEAN group of nations.

Aviation Key Facts

Passengers carried in Indonesia have risen from 48.8 mil in 2009, 58.3 mil in 2010, 68.3 mil in 2011 and 77.2 mil in 2012.

Traffic and planned expansion in several airports

Passengers (Millions) Jakarta Surabaya Denpasar Makassar Medan Balikpapan Yogyakarta
Traffic in 2012 52.5 13.8 12.8 7.5 7.2 5.6 4.3
Capacity 22 7.4 9.4 7.3 1 1.4 1
Planned Expansion 62 12 25 9 11

 Source: Easts.info (Eastern Asia Society for Transportation Society)

Indonesia replaced India as the third largest domestic market in 2012 with 233 public airports in total – 29 international and 20 domestic. Government owns 164 airports, with 28 new airports to be built with 10 relocation and upgrades of many existing airports.

101 heli-decks and 51 heliports

447 airdromes for light aircraft operations

            International & Domestic Passengers

Year Domestic International
2003 42.85 8.69
2004 59.75 10.95
2005 55.79 11.86
2006 69.36 11.7
2007 73.1 13.37
2008 75.27 14.74
2009 89.07 16.31
2010 105.07 19.24
2011 126.53 21.74
2012 157.21 25.32

 

indonesia av

Part 121 airlines – 22

Part 135 operators – 31

1319 registered aircraft of which 993 are operational

Every month, Part 121 operators take delivery of 5 new aircraft Garuda Indonesia = 2 and Lion Air = 2.  Airlines, despite adding capacity monthly, are achieving loading of around 80%.

As the expansion plan is working in Soekarno- Hatta International Airport to increase capacity, there is a possibility of an alternative airport in Jakarta just for the ASEAN flights.

 

Major Scheduled Airlines in Indonesia

Major Scheduled Airlines Market Share (Domestic) Market Share (International) First Hub Second Hub Ownership/Status
Garuda Indonesia 22.82% 37.03% Jakarta Denpasar State- listed (Government 69.14%, Listed 27.98% owned)
Lion Air 41.59% 10.80% Jakarta Surabaya Private Owned
Indonesia Air Asia 2.20% 40.58% Jakarta Denpasar Private Owned (Air Asia 49%)
Sriwijaya Air 12.20% 2.25% Jakarta Surabaya Private- Owned
Baatavia Air 10.25% 3.59% Jakarta Surabaya Private- Owned
Merpati Air 2.64% 1.10% Makansar Surabaya State owned
Wings Air 3.37% 1.43% Makansar Surabaya Subsidiary of Lion Air
Citilink 2.12% 0% Surabaya Jakarta Subsidiary of Garuda
Tiger Mandala 1.81% 3.22% Jakarta Medan Private Owned (Tiger Air)

 

Lion Air, Number #1 Domestic Airlines (Year 2013)

Following the end of Batavia Air on 2013, Indonesia’s domestic market is served by 11 airlines. Though capacity is fairly concentrated among all these airlines but three largest airlines account for around 65% of weekly frequencies and 70% of seats. Lion Air, which has grown aggressively in recent years (domestic capacity +38% in April 2014 vs. April 2013), and has over 300 Boeing narrow-bodies on order, commands 45% of Indonesia’s weekly domestic seats.

Airlines Frequency Share Capacity Share
Lion Air 34% 44.40%
Garuda Indonesia 21.70% 20.50%
Sriwijaya Airlines 12.20% 10.40%
Citilink 6.60% 6.80%
Wings Abadi Airlines 11.30% 6.60%
AirAsia Indonesia 3.90% 4.30%
Merpati Nusantara Airlines 4.30% 3.40%
Trigana Air Service 3.60% 2.10%
Mandala Airlines 0.80% 0.90%

 

indonesia av 2

Top international destinations from Indonesia

Among the top 10 international destinations 7 of them are within ASEAN. Singapore leads the ranks while a total of 463 weekly flights are offered on the route by 16 airlines from just as many Indonesian airports, 54% of capacity is allocated to Jakarta.

Cities/ Airports Capacity
 
Singapore (SIN) 92578
Kuala Lumpur KUL) 74285
Hong Kong (HKG) 22551
Bangkok (BKK) 12400
Jeddah (JED) 12380
Perth (PER) 110556
Penang (PEN) 9665
Taipei (TPE) 8771
Dubai (DXB) 8771
Seoul Incheon (ICN) 79396

indonesia av 3

There are:

  •          7825 pilots growing at 5.21% pa
  •           3607 Flight Officers growing at 7.75%
  •          6602 engineers growing at 3.78%
  •          65,000 licensed aviation personnel

(as at August 2012)

At present Indonesia produces:

  •          320 –  650 pilots per year
  •         100 -180 engineers per year
  •           200 ATC per year

(Figures vary depending on sources)

By the end of 2015, Indonesia will require an additional:

  •          4,000 new pilots
  •          7500 new engineers
  •          1000 new ATC

Challenges

  •        increase capacity
  •        increase capability of instructors
  •        increase quantities of trained staff produced domestically

In conclusion the insufficient air traffic management is also a potential setback to growth of Indonesian Aviation market and the government is seeking split ATC function into a separate agency

 

 

 

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