Sector Guide Indonesian Airports Size, growth, opportunity
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Published September 2019 by Department for International Trade Foreword
With some 17,500 islands, a west to east distance greater than London to Moscow, a population of about 250 million and a rapidly growing number of middle class consumers, the demand for more and bigger airports, equipment and aircraft will be intense over the coming years. I believe the UK global airport experience and expertise, tailored to Indonesian requirements, can bring a compelling package for Anglo-Indonesian co-operation. This report provides an overview of the airport sector in Indonesia, including its challenges and its considerable opportunities. I’m keen for more medium-sized British companies to take a serious look at the Indonesian market and visit – it is the only way to get a sense of the potential of this Asian giant. UK airport firms that succeed in Indonesia have an on the ground presence and demonstrate persistence, perseverance, and (a gentle) pushiness in their approach. They also recognise that Indonesia is a relationship based market and see my team, and our extensive network, as an extension of their own. I hope we can be part of your firm’s Indonesian success story too.
Joel Derbyshire Director of Trade and Investment Department for International Trade British Embassy Jakarta 02 Sector Guide: Indonesian Airports Sector Guide: Indonesian Airports 03
10 New Bali destinations
Lake Toba, North Sumatra Tanjung Lesung, Banten Kepulauan Seribu, Jakarta Tanjung Kelayang Beach, Bangka Belitung Borobudur Temple, Central Java Mount Bromo, East Java Mandalika, West Nusa Tenggara Labuan Bajo, East Nusa Tenggara Wakatobi, South Sulawesi Morotai Island, North Maluku
increase in people’s ability to travel3. The airport sector plays a massive Increased demand is creating appetite role in the effort as the destinations for improved airport facilities and will generate further demand for air airport experiences. transportation. At the same time, tourism has grown In order to attract both domestic and to be Indonesia’s second largest foreign visitors to the 10 new Balis, the sector and is projected to become Ministry of Transportation’s Directorate Size operation of 169 airports through the the largest by 2020. In response, General of Air Transportation plans Directorate General of Civil Aviation. the Indonesian government has to expand and improve a number of In order to fulfill the ever-growing launched a programme to accelerate airports that are located near the demand for air transportation and its the development of new tourism destinations. facilities, the Ministry of Transportation Growth destinations: the 10 New Balis. The is focusing on the development of new From 2012 to 2016, the number programme is aimed at replicating airports across Indonesia. of domestic flights grew by 5.2% Opportunity the success of Bali as an international annually, whilst the number of As of 2019, Indonesia is home to 297 tourism destination while accentuating Airport investment continues to play 2 1 international flights grew by 4.4%. airports , with more new developments the new destinations’ local offerings. an important role in the connectivity currently underway. 35 of Indonesia’s Indonesia’s air traffic is projected to between regions in Indonesia and the The plan to grow the tourism sector airports are operated by national grow by 4.8% every year until 2025. National Investment Coordinating beyond Bali’s popularity complements operators, while the Ministry of The growing demand is being fueled Board of Indonesia has been tasked the government’s broader strategy Transportation also supervises the by growth in the economy, and an with attracting international investors. for more infrastructure development, particularly to enhance connectivity. The Indonesian Government wants 1 http://hubud.dephub.go.id/?id/bandara/index (data on numbers of airports in Indonesia, in all provinces and all categories) 3 https://www.pwc.com/id/en/media-centre/press-release/2015/english/issues-challenges-for- 2 https://www.pwc.com/id/en/cpi/asset/the-prospects-for-airport-ppps-in-indonesia.pdf airport-investment.html 04 Sector Guide: Indonesian Airports Sector Guide: Indonesian Airports 05
private sector involvement in the Staff training Udara)6 license by the Ministry of manages airports in the western part airport sector, and has released Public Pilot training Transportation. Consequently, most of the country, with supervision from Private Partnership (PPP) projects, Interior fit-out investors might need to work with the Ministry of Transportation and Ministry including the Hang Nadim Airport Security systems Indonesian state-owned enterprises, of State Owned Enterprises. Air traffic
in Batam, Labuan Bajo and Lombok Cargo building construction Angkasa Pura I and Angkasa Pura II, control is managed by AirNav (another
Airports. ATC equipment which are already in possession of the SOE). Airside operations/ ground licenses.7 The government is also carrying handling equipment out mega airport projects, such as Docking systems Indonesia also has many state owned Indonesian Airlines the construction of Soekarno-Hatta Cargo handling systems companies that excel in infrastructure There are 21 domestic airlines construction. This advantage is Terminal 4 and the new Yogyakarta The government has also identified operating in and out of Indonesian fully maximised by the Indonesian Airport, both of which aim to boost the airport projects which have strategic airports, including cargo airlines, Government to protect the State- number of passengers and improve value for the country’s economy. charter airlines and scheduled Owned Enterprise (SOE) market share. passenger experience. The New The Indonesian Committee for passenger airlines. Some of the most Consequently, it is often preferable Yogyakarta International Airport is Acceleration of Priority Infrastructure well-known ones include national to partner with SOEs rather than scheduled to begin operations this Delivery (KPPIP) has a central role in carrier Garuda Indonesia and its compete directly. year, targeting 2-3 million international monitoring, coordinating and speeding subsidiary Citilink, which make up 26% passengers. With the construction of up the delivery of these projects.4 of the domestic market, as well as low the new Soekarno-Hatta Terminal4, Stakeholders cost carriers Lion Air, Malindo, Wings Jakarta’s capacity will increase to 110 and Batik Air Group which represent Challenges million passengers per year. Government 35% of the domestic market. Air Asia, There are certain challenges for those Sriwijaya Air and NAM Air focus on With such massive airport The Directorate General of Civil wishing to make an investment in the regional routes. development, opportunities remain Transportation from the Ministry of Indonesian airport sector. For example, open for UK expertise and capabilities. Transport oversees and regulates the Operational strategic partners include the Indonesian negative investment UK companies can offer products operations and administration of all subsidiary companies of Angkasa list only allows foreign corporations and services needed by Indonesia airport infrastructure in Indonesia. Pura (AP Logistics, Gapura for ground to take stakes of up to 49% in airport including: handling, AP Hotels & Property operators.5 PPP finance advisory Airport Operators and AP Solutions for IT and facility management). Jasa Angkasa Semesta Procurement advisory The issue of airport licensing has also State-Owned Enterprises Angkasa Pura (JAS) focuses on providing airport Architecture and design been known to cause foreign investors I and Angkasa Pura II are responsible services such as ground handling, consultancy to be reluctant to invest in the airport for the management of airports in Safety and security advisory CRO, Engineering, Flops, Ticketing sector. There is no precedent yet for Indonesia. Angkasa Pura I manages Airport operations advisory and Security, other providers include private sector operators to be awarded airports in central and eastern regions Organisation development Garuda CRO and Garuda Maintenance a major airport operating license, of Indonesia, while Angkasa Pura II advisory or the BUBU (Badan Usaha Bandar 6 http://dephub.go.id/perizinan/izin-pengusahaan-bandar-udara-komersil-izin-badan-usaha- 4 https://kppip.go.id bandar-udara-direktorat-bandar-udara 5 http://www.gbgindonesia.com/en/services/article/2014/indonesia_s_aviation_andamp_ 7 https://www.pwc.com/id/en/cpi/asset/the-prospects-for-airport-ppps-in-indonesia.pdf airports_sector.php 06 Sector Guide: Indonesian Airports Sector Guide: Indonesian Airports 07
Airport Stakeholders
Regulator Airlines Operators/ Owners Operational • DGCA - under • Garuda (National 240 Airports Strategic Partners Ministry of Transport Airline) & Citilink 26% • Angkasa Pura I - 13 • Angkasa Pura: AP of domestic market • AirNav Indonesia airports in Eastern Logistics, Gapura under Ministry of • Lion Air, Malindo, Indonesia (Ground Handlings), AP Hotels & Property, SOEs Wings, Batik: 35% of • Angkasa Pura II - 13 domestic market AP Solutions (IT, • Ministry of SOEs airports in Western facility management) (oversee API & II) • Air Asia (Focus on Indonesia regional routes) • JAS Airport Services • Ministry of Transport: (ground handlings, • Sriwijaya Air, NAM Air 169 airports CRO, Engineering, • Airforce operated by Flops, Ticketing, AP (11 airports, 3 fully Security) operational) • Pertamina - the only • PPP (Kertajati, New fuel supplier Medan, New Baki, New • Garuda CRO, Flops Soekarno Hatta • Garuda Maintenance Facility (MRO) 08 Sector Guide: Indonesian Airports Sector Guide: Indonesian Airports 09
Sultan Iskandar Muda International Airport Banda Aceh, Aceh (since 9 April 1994) Airport Operations Kualanamu International Airport Medan, North Sumatra (Replaced Polonia International Airport on 25 July 2013) Angkasa Pura I Angkasa Pura II Raja Haji Fisabilillah International Airport Tanjung Pinang, Riau Islands (since 22 March 2000)
APT Pranoto International Airport Samarinda, East Kalimantan Sam Ratulangi International Airport Sultan Syarif Kasim II International Airport Manado, North Sulawesi, (since 1 January 1989) Pekanbaru, Riau (since 9 April 1994) Sultan Aji Muhammad Sulaiman Supadio International Airport International Airport Balikpapan, East Kalimantan Kuburaya, West Kalimantan (since 8 (since 9 January 1987) February 1991) Syukuran Aminuddin Amir Airport Frans Kaisiepo International Airport Silangit International Airport Biak, Papua (since 1 January 1989) Sultan Thaha Airport Luwuk, Central Sulawesi Siborong-Borong, North Sumatra Jambi, Jambi - (since 1 April 2007) (since 14 December 2012) Depati Amir Airport Pangkal Pinang, Bangka–Belitung Islands (since 1 April 2007)
Minangkabau International Airport Tjilik Riwut Airport Padang, West Sumatra Palangkaraya, Central Kalimantan, (Replaced Tabing Airport on 22 July 2005) (since 1 Januari 2019)
H.A.S. Hanandjoeddin International Airport Belitung, Bangka Belitung
Fatmawati Soekarno Airport Halim Perdanakusuma Syamsudin Noor International Airport Pattimura International Airport Sultan Mahmud International Airport Banjarbaru, South Kalimantan Bengkulu, Bengkulu Ambon, Maluku (since 11 October 1995) Sentani International Airport Badaruddin II Jakarta, Jakarta (since 13 (since 29 April 1992) Jayapura, Papua International Airport August 1984) Juanda International Airport Palembang, South Sumatra Surabaya, East Java Sultan Hasanuddin International Airport (since 8 February 1991) (since 1 January 1985) Makassar, South Sulawesi (since 9 January 1987) Radin Inten II International Airport Bandar Lampung, Lampung
Soekarno–Hatta International Airport Tangerang, Banten Achmad Yani International Airport (since 5 July 1985) Semarang, Central Java (since 1 October 1995)
Adisucipto International Airport Yogyakarta, Special Region of Yogyakarta (since 29 April 1992) Ngurah Rai Adisumarmo International Airport International Airport El Tari International Airport Husein Sastranegara International Airport Solo/Surakarta, Central Java Denpasar, Bali Kupang, East Nusa Tenggara Bandung, West Java (since 9 April 1994) (since 29 April 1992) (since 30 March 1989) (since 1 April 1999)
Banyuwangi International Airport Banyuwangi, East Java (since 22 December 2017) Lombok International Airport Mataram, West Nusa Tenggara (Replaced Selaparang Airport on 1 October 2011) 10 Sector Guide: Indonesian Airports Sector Guide: Indonesian Airports 11
Facility (GMF). The biggest fuel supplier Export from the UK in Indonesia is Pertamina, another state owned enterprise. DIT provides funding to the UK ASEAN Business Council to run UK Trade Bodies roadshows and events on Indonesia. The Association of Indonesian Airport You will find information about Experts (IABI) is an independent, non- these on the Indonesian page of the profit organisation that consists of ASEAN Business Council website: regulators, operators, consultants and www.ukabc.org.uk/market/indonesia academics. UKABC can also offer one to one consultations with export advisors who have expertise and knowledge of the Next Steps Indonesian market.
How to export to Indonesia In market support DIT helps UK businesses export and DIT based at the British Embassy grow in global markets. We also help Jakarta, can support your export overseas companies locate and grow activity through a number of ways: in the UK and internationally. Our
services are provided in over 100 Market introduction and local intelligence markets throughout the world. Relationship building The UK Government’s export credit Access to Indonesian Government agency, UK Export Finance (UKEF) is and State Owned Enterprises an integral part of DIT’s operations and Information on local strategy. UKEF helps companies in the representation from the British UK to: Chamber of Commerce. Airport sector events and trade partners and contacts, arranging for British businesses that are Win export contracts by providing missions in the UK, Indonesia and company visit programmemes, interested in developing their attractive financing terms to their the SE Asia region business matchmaking, trade missions overseas trade and doing business buyers G2G support and offering sector-specific B2B in Indonesia.
Fulfil orders by supporting webinars. www.gov.uk/government/ working capital loans DIT also funds our local partner publications/overseas-business- Get paid by insuring against buyer the British Chamber of Commerce risk-indonesia to review default Indonesia (BritCham), to provide You can also visit: information on how UK businesses market entry services. www.gov.uk/government/ can control risks when operating publications/exporting-to- in Indonesia. BritCham offers market research, indonesia to access guidance https://opportunities.export.great. promote products or services, export strategy development, identify local 12 Sector Guide: Indonesian Airports
gov.uk/opportunities-indonesia to To keep yourself updated on access Indonesian export sales the Indonesian market, follow leads. #IndonesiaMatters on Twitter http://www.ukabc.org.uk/ @tradegovukIDN. publication/indonesia-matters- size-growth-and-opportunity/ to access Indonesia Matters, a strategic country overview.
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