Passenger numbers continue to grow amid airfare price fluctuations
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 - Penumpang terus tumbuh ditengah gejolak harga tiket pesawat
17 July 2024
By Ichsan Amin
Jakarta, ID – Despite rising domestic airfares, airport operators reported that passenger numbers have continued to grow, reaching levels close to those seen before the Covid-19 pandemic.
PT Angkasa Pura I (AP I) President Director MMA Indah Preastuty said that, throughout the first half of 2024, her company served 36.5 million passengers at 17 of their managed airports. This indicates a recovery rate of 91% for AP I, considering the passenger count prior to the Covid-19 pandemic in the first half of 2019 was 40 million.
“The strong performance of AP I in the first half of 2024 can be attributed to several factors. These include the significant flow of travelers during the Eid homecoming and return period in 2024, Hajj transportation, school holidays, and the increased number of weekends and collective leave days in the first half of 2024. We remain optimistic that air transportation will fully recover this year,” she stated in a press statement on Tuesday (16/7/2024).
Indah Preastuty clarified that the passenger count for AP I in the first half of 2024 was split into 28.1 million passengers on domestic routes and 8.4 million passengers on international routes. The recovery rate for domestic route passengers has reached 95%, while the number of international route passengers has fully recovered, matching the count from the first half of 2019.
AP I has also seen a positive trend in the cargo sector with a growth of 20% in the first half of 2024 to reach 282,729 tonnes. This is a significant increase compared to the cargo traffic in the first half of 2019, which was recorded at 236,259 tonnes.
“In other words, AP I’s cargo traffic performance in the first half of 2024 surpassed its performance in 2019,” she explained.
In the first half of 2024, cargo traffic was split into 252,553 tonnes for domestic cargo and 59,683 tonnes for international cargo. This represents a 61% growth in domestic cargo compared to the first half of 2019. On the other hand, international cargo has achieved a recovery rate of 51%.
In terms of flights, AP I recorded a total of 284,756 flights in the first half of 2024. This represents an 80% recovery rate compared to the 354,576 flights logged in the first half of 2019.
The flights are categorised into 237,195 domestic flights, which have achieved a recovery rate of 82%, and 47,561 international flights, which have reached a recovery rate of 98%.
Meanwhile, PT Angkasa Pura II (AP II), through its management of Soekarno-Hatta International Airport, has achieved a recovery rate of 93%. Dwi Ananda, the Executive General Manager of Soekarno-Hatta Airport, stated that the airport was able to recover more swiftly from the Covid-19 pandemic thanks to a transformation programme.
In 2023, the number of passengers at Soekarno-Hatta Airport reached 50.9 million passengers, reflecting a recovery rate of 93% from 2019 before the pandemic. “This encourages Soekarno-Hatta Airport to be appointed as the most-recovered airport at the Asia-Pacific Aviation Network Champions this year,” Dwi Ananda said recently.
Dwi Ananda added that his company would improve services for aircraft passengers to anticipate peak periods.
“Soekarno-Hatta Airport will sustainably improve its services and operational standards to maintain its global ranking in upcoming years,” he added.
Soekarno-Hatta Airport currently serves passenger flights through 3 terminals, Terminal 1, Terminal 2, and Terminal 3.
Beware of external factors
An aviation observer, Gatot Rahardjo, emphasised the continued necessity of aircraft as a means of rapid transportation across all social classes. However, he highlighted the need for attention to several factors, particularly external ones influencing public interest in air travel.
“The demand for air travel is a constant and is expected to grow over time. However, certain factors warrant close attention. For instance, fluctuations in the US dollar and jet fuel prices due to external upheavals,” he revealed to Investor Daily.
According to him, the US dollar and jet fuel prices directly affects airfares due to the high operating costs of flights. He said that the government must anticipate these factors. “Mitigation measures are a must. The high cost of jet fuel, which is tied to the strength of the US dollar as it is the currency used for purchase, necessitates such actions,” he stated.
He added that the government could anticipate this issue by facilitating a more flexible tariff. With a more flexible tariff and supervision by relevant authorities, airlines are expected to be able to prepare a strategy to handle this matter. “Therefore, passengers will think twice about flying at certain times. We hope the market will remain stable with a flexible tariff,” he added.
Airfares remain high
Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan drew attention to the issue of high airfares. He noted that this has been a recent cause for complaint among many stakeholders.
“Global aviation activities have rebounded to 90% of their pre-pandemic levels. According to the data from IATA, the year 2024 will see a global passenger count of 4.7 billion, marking an increase of 200 million passengers from 2019. When compared to ASEAN countries and other populous nations, Indonesia’s airfares rank as the second most expensive, trailing only Brazil,” Luhut revealed last week.
He confirmed that his agency is formulating various measures to enhance flight efficiency and reduce airfares. This includes an evaluation of aircraft operational costs, with the cost per block hour (CBH) being the most significant component. In addition, the government is devising strategies to lower the CBH, taking into account the type of aircraft and flight service.
“In addition, plans are underway to expedite policies that exempt import duties and eliminate restrictions on certain imported products. It is worth noting that maintenance constitutes 16% of the total cost, following jet fuel expenses,” he said.
Coordinating Minister Luhut further explained that implementing a route-based tariff mechanism could result in passengers who transfer or change flights being subject to double VAT, mandatory contribution to Jasa Raharja (IWJR), and passenger service charge (PSC).
“The airfare calculation mechanism should be revised to reflect the airlines’ operating costs per flight hour. This adjustment could lead to a significant reduction in airfares,” he added.
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