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.
Bisnis Indonesia - Industri penerbangan: Maskapai masih butuh stimulus
30 May 2024
By Lorenzo A. Mahardhika and Hendra Wibawa
National airlines are still seeking government support to improve airport management efficiency, as the proposal to raise the upper airfare limit for economy class was not approved by regulators.
This year, the Indonesian aviation industry will face significant challenges. Several obstacles continue to plague the aviation sector in Indonesia.
One of the obstacles is operational pressure caused by the depreciation of the rupiah against the US dollar.
Indonesia National Air Carrier Association (INACA) Chairperson Denon Prawiraatmadja stated that the rupiah's exchange rate against the US dollar significantly impacted aircraft operational costs.
He estimated that approximately 70% of aircraft operational costs were influenced by the US dollar, including aviation fuel prices, aircraft lease costs, and maintenance and repair expenses.
He emphasised the necessity of communication and coordination among relevant ministries regarding the impact of currency exchange rates on the transportation sector, including air transportation.
Under this pressure, he hopes that the Transportation Ministry will respond positively to INACA's proposal to revise the upper airfare limit for economy class. Denon added that discussions with relevant regulators were currently underway regarding the revision of the upper tariff limit.
“Our concern lies with ministries that contribute to the increase in transportation prices, not just in air transportation,” he said on Tuesday (28/5).
Denon further suggested that the government could support the air transportation sector to continue its development amidst the trend of exchange rate correction.
“Support could come in the form of more efficient and effective airport development through the implementation of a refined hub and spoke concept,” Denon stated.
In contrast, Adita Irawati, a spokesperson of the Transportation Ministry, stated that discussions regarding the plan to revise the upper tariff limit were ongoing. She also mentioned that regulators had engaged in numerous discussions with airlines regarding the airfare limit revision.
However, she said that regulators did not have any immediate plan to revise the tariff limit.
Adita stated that the Transportation Ministry would monitor the situation's development before considering any revision to the upper and lower limits of airfare.
“As of now, there are no plans [to revise the upper airfare limit]. We need to wait for the right opportunity to make any adjustment. We will continue to monitor the situation,” Adita explained.
Meanwhile, PT Angkasa Pura Indonesia, also known as InJourney Airports, reported serving 14.4 million passengers across 37 airports under its management in April 2024.
InJourney Airports President Director Faik Fahmi said that the number grew 19% from 12 million passengers in April 2023.
In terms of flights, all the airports collectively served 120,846 flights, marking a 22% increase from the 99,218 flights recorded in April 2023.
During the same period, InJourney Airports handled 97,730 tonnes of cargo, representing a 2% decrease from the 99,791 tonnes handled in April 2023.
“The traffic growth in April 2024 is a positive indication for the operational performance of InJourney Airports in the second quarter of 2024. This surge in traffic will also significantly contribute to our goal of fully recovering in terms of air transportation traffic,” Faik said in his official statement.
Towards recovery
In April 2024, Soekarno-Hatta Airport remained the airport with the highest traffic, in terms of passengers, flights, as well as cargo.
He added that Sentani Airport in Jayapura and Sultan Hasanuddin Airport in Makassar recorded the second and third highest cargo movement, respectively, in April 2024.
Cumulatively, InJourney Airports served 49.7 million passengers from January to April 2024, a 7% increase from the 46.6 million passengers during the same period last year.
“In terms of the recovery rate, compared to the 55 million passengers served from January to April 2019 before the Covid-19 pandemic, the recovery rate currently stands at 90%,” he stated.
On another occasion, AirAsia Indonesia logged a 90% increase in passengers throughout 2023.
PT AirAsia Indonesia Tbk (CMPP) Director Veranita Yosephine Sinaga said that the company served 6.18 million passengers in 2023.
“This number increased by 90.27% from 3.24 million passengers in 2022,” he said.
Vera explained that the passenger growth was supported by the operation of 24 aircraft in 2023.
