Down side of a booming business

by CHIEF CORRESPONDENT, TOM BALLANTYNE  

March 1st 2015

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China and India hog the headlines when it comes to passenger growth, but the region’s third largest market, Indonesia, is discovering that passenger thirst for travel is being stymied by outdated infrastructure and equipment and teeming airports. Read More »

According to Bayu Sutanto, chairman of the Indonesia National Air Carriers Association (INACA), the country’s airline industry has reached saturation point, with the lack of infrastructure development, particularly airports, preventing airlines’ expansion.

He illustrated his point with recent figures from Badan Pusat Statistik (BPS or Central Bureau of Statistics) which revealed a decline in Indonesian outbound international travel of more than four percent. But while overall international growth is slowing, some key international airports are coming under tremendous stress as passenger demand outstrips airport capacity.

At Kualanamu International Airport in North Sumatra outgoing passenger numbers surged 37.3% in 2014, followed by Jakarta’s Soekarno-Hatta International Airport, up 34.68%, and the Sultan Hasanuddin International Airport in Makassar, South Sulawesi, with an increase of 24.14%.

“The data from the BPS showed the airline industry has reached saturation because the increase in seat capacity was not supported by an increase in airport capacity and improvements in infrastructure,” said Bayu.

“The lack of infrastructural development did not only affect Soekarno-Hatta. There are other airports across the [Indonesian] archipelago similarly affected. The fact that not all airports are operating 24 hours a day contributed to the slowed growth in the number of passengers.”

While the government has airport expansion and modernization plans these are expected to take several years of construction. At Jakarta’s international airport, its operator, Angkasa Pura II (AP II), has been working to increase movements from 72 flights an hour to 86 from June to ease congestion.