Major airlines nurturing units to tap growth

JAKARTA. Indonesia’s aviation industry is gearing up for an aggressive expansion next year to tap the increasing number of domestic and international passengers as the country’s economic growth is forecast to be among the world’s highest. 

The Transportation Ministry has projected a 15 percent growth in air travel next year, or around 167 million passengers. The figure includes those carried by international airlines and operators of frontier routes. 

“Our aviation sector is going to enjoy rapid growth next year, triggering expansion by the airline industry. Although it will result in fiercer competition among operators, it will have a positive impact on customers, the industry and the economy in general,” said the Transportation Ministry’s air transportation director general, Herry Bhakti Gumay.

Herry said the rapidly expanding airline sector would provide competitive airfares to customers and encourage airlines to continue to improve their businesses. “We have seen healthy competition and I believe this will remain so as the pie is getting bigger for everyone to enjoy,” he said, adding that greater air accessibility would help accelerate economic development, particularly at the regional level.

As the big boys in the country’s airline industry will remain occupied with adding capacity by operating new aircraft and opening up more routes, the industry is expected to become more vibrant with the arrival of new players in the full-service segment. 

“All of the new domestic airlines are going to enter the full-service market. Air passengers who seek comfort during flights will have more options,” said Djoko Murjatmodjo, also an air transportation director in the ministry. State-run Garuda Indonesia is currently the leader in the full-service segment. 

As the economy is expected to grow by 6.8 percent next year, consumers are expected to have greater purchasing power and thus wish to enjoy premium services. 

Batik Air, the full-service unit of Lion Air, plans to launch its maiden flight in May, operating 10 Boeing 737-900 Extended Range (ER) planes. According to its flight permit (SIUAU), Batik has secured approval to fly on as many as 66 domestic and 20 international routes. 

In the third or fourth quarter of next year, Nam Air, Kartika Airlines and Jatayu Air are also expected to tap the booming market. 

Nam Air is the subsidiary of privately owned Sriwijaya Air, the third-largest domestic airline after Lion Air and Garuda Indonesia. The new full-service carrier is set to fly with 20 Brazilian-made Embraer 190s to serve airports with shorter runways. 

Kartika Airlines and Jatayu Air will operate Russian made Sukhoi Superjet 100s and 737s, respectively, according to the Transportation Ministry. Kartika Airlines’ commercial director Aditya Wardhana, said the airline would start commercial flights with two of 30 Sukhoi Superjet 100s. “We expect to start the operation with two aircraft. We plan to operate 10 Sukhois by May 2014 to serve medium-haul domestic routes,” Aditya said.

He said that the Sukhoi sub-100 jets would operate from Makassar, South Sulawesi, and Surabaya, 
East Java.

Lion Air, which provides a low-cost service and controls 40 percent of domestic passenger traffic, will pour most of its resources next year into helping out its new units. Lion will receive 36 new aircraft: 30 737-900 ERs with seating capacity of 189 in a single-class layout or 177 seats in two classes, and six ATR-72s, a twin-engine turboprop short-haul regional airliner built by French-Italian manufacturer ATR. 

Lion Air general affairs director Edward Sirait said the new aircraft were not only aimed at supporting the expansion of its feeder Wings Air, but also the operation of its new airlines Batik and Malindo Airways, the latter a joint venture with Malaysia’s National Aerospace and Defense Industries. 

Edward said parent company Lion Air and Wings Air would only add six 737-900 ER and four ATR-72 aircraft to their operations in 2013, giving the largest share to the new carriers. “We are not adding many new aircraft [to Lion and Wings] because we are focusing on expanding Batik and Malindo,” he said. Malindo will operate 12 737-900 ER and two ATR-72 aircraft in March. 

Meanwhile Garuda Indonesia, which handles around 20 percent of the domestic traffic, has also eyed expanding the operation of its low-cost unit Citilink next year. 

“We are going to receive 10 new Airbus A320s and a delivery of between six to eight turboprop planes throughout 2013 as well. The aircraft will be operated by Citilink,” said Garuda president director Emirsyah Satar, adding that the company was currently studying the Bombardier Q400s and ATR-72 planes for the turboprop market and expected to announce the final results before the end of 2012.

With the new aircraft, Citilink is slated to operate 30 A320s to strengthen its domestic routes and eight small aircraft to cater to the short-haul market next year.

The Jakarta Post / Nurfika Osman