Air passenger growth stagnating
This article has been translated by PwC Indonesia as part of our Indonesia Infrastructure News Service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.
Investor Daily - Pertumbuhan penumpang udara alami stagnasi
6 August 2024
By Ichsan Amin
Jakarta, ID – Statistics Indonesia (BPS) has reported that the number of domestic air passengers from January to June 2024 slightly increased by 0.71%, rising to 30.4 million individuals from 30.2 million individuals in the same period last year.
The highest number of passengers was recorded at Soekarno-Hatta International Airport in Tangerang, which accommodated 8.8 million passengers, accounting for 29.03% of the total domestic air passengers. Meanwhile, Juanda Airport in Surabaya served 2.6 million passengers, making up 8.43% of the total domestic air passengers.
In June 2024, the number of international passengers reached 1.6 million, marking a 2.70% decrease from May 2024. Notable declines were observed at Hasanuddin Airport in Makassar with a drop of 42.24% and at Juanda Airport in Surabaya with a decrease of 15.13%.
The highest number of international passengers was recorded at Soekarno-Hatta Airport in Tangerang with 654,000 individuals, accounting for 41.66% of the total international passengers. This was followed by Ngurah Rai Airport in Denpasar, which served 615,400 individuals, representing 39.20% of the total international passengers.
Aviation observer Gerry Soejatman said that the aviation industry was currently facing a dilemma due to the stagnant growth of air transportation passengers.
He noted that the aviation industry was facing a dilemma due to ongoing discussions about airfares by the Coordinating Ministry for Maritime Affairs and Investment. The government is requesting that airfares be lowered, based on a study of various factors.
“The aviation industry is advocating for a revision of airfares, as current conditions no longer align with the tariff regulations set in 2019 for the upper and lower limits. Since then, the exchange rate of the rupiah to the US dollar has changed, necessitating an adjustment in airfares,” Gerry said to Investor Daily in Jakarta on Monday (5/8/2024).
Gerry mentioned that passenger growth over the next two months was expected to remain relatively stable compared to previous years. However, an increase is anticipated during peak seasons at the end of the year, particularly around Christmas and New Year.
“However, this will depend on the government's decision regarding airfares. In the next two months, I expect passenger numbers to remain stagnant or similar to previous years,” he added.
Previously, Indonesia National Air Carriers Association (INACA) have welcomed the government's efforts to lower costs in the national aviation industry. With these reduced costs, airlines are expected to achieve higher profit margins from their operations. This, in turn, will enable them to provide excellent flight services and support the government's efforts to enhance national flight connectivity.
INACA Chairperson Denon Prawiraatmadja stated that flight costs were currently extremely high, exceeding the tariff limits set by the government in 2019.
“As a result, airlines are losing money. They operate merely to stay afloat and are unable to expand their businesses,” Denon said.
According to Denon, both operational and non-operational costs must be reduced or eliminated. For instance, operational costs include the high price of jet fuel, which is more expensive compared to neighbouring countries, as well as the additional fuel burned due to aircraft queues on the ground and in the air. Other costs include passenger service charges and navigation service fees.
Denon added that most flight costs were directly and indirectly influenced by the exchange rate of the US dollar. Therefore, if the US dollar continues to strengthen, flight costs will also increase. “This must be anticipated so that a solution can be found,” Denon stated.
Additionally, the inclusion of the passenger service charge in the ticket price makes airfares appear higher. “Passengers are often unaware that the passenger service charge is imposed by the airport management, not the airline. Since it is included as a single component in the ticket price, passengers mistakenly assume that the charge is implemented by the airline,” he added.
Make international routes more efficient
AirNav Indonesia, officially known as the Indonesian Flight Navigation Service Institution (LPPNPI), is working to enhance the efficiency of flight routes to support the country's aviation industry. To achieve this, they are testing the implementation of user-preferred routes in the airspace between Indonesia and Australia. The trial took place on Sunday.
AirNav Indonesia President Director Polana B. Pramesti said that that this historic moment marked a collaboration between AirNav Indonesia, Airservices Australia, and four international airlines, namely Garuda Indonesia, Singapore Airlines, Qantas, and Air New Zealand.
“The implementation of user-preferred routes enables airlines to collaborate and participate in the cross-country free route program, which was launched on 5 August 2024.,” she stated.
Polana further emphasised that the user-preferred route programme demonstrated the commitment of AirNav Indonesia, Airservices Australia, Airways New Zealand, and CAAS to enhancing efficiency, safety, comfort, and eco-friendliness in the Asia-Pacific region's airspace.
“We hope that the upcoming trial will be successful and bring benefits to all airlines operating in Asia-Pacific airspace,” Polana added.
The user-preferred route programme is an airspace management method that employs the free-route airspace concept. This approach allows airlines to determine their most efficient routes while considering factors such as traffic, wind direction and speed, turbulence potential, air temperature, and aircraft type and performance.
AirNav Indonesia implemented the user-preferred route programme in Indonesian airspace on 5 October 2023. This cross-country initiative is an extension of said programme, designed to provide greater flexibility for international flights.
