Air transportation: Aviation recovery to accelerate in 2023
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 - Pengangkutan udara: Pemulihan penerbangan bakal terakselerasi 2023
17 November 2022
By: Anitana W. Puspa
PT Angkasa Pura I and PT Angkasa Pura II are optimistic about the aviation sector recovery accelerating in 2023 as air transportation demand increases.
PT Angkasa Pura (AP) II President Director Muhammad Awaluddin said that air transportation had become a necessity of the people. The sectors that need air transportation are tourism, business activities, and company or institution operation.
“So, we are optimistic, but we are still careful and conservative in 2023 by targeting 71 million passengers. The recovery rate is approaching 89% compared to 2019,” he said on Wednesday (16/11).
This year, he said that the number of aircraft passengers could surpass 60 million people.
He said that the momentum from the Christmas and New Year holidays would boost flight demand. Awaluddin mentioned that the culture of the Indonesian people during religious holidays would be the driver until the end of this year.
“During Christmas and New Year, movements at AP II airports can reach 6 million passengers. So, we are optimistic about closing this year with 60 million passengers. We only need to face next year,” he said.
He stated that passenger movement at the end of the year or during the Christmas and New Year period would not be too different from Eid.
He hopes that there will be no new Coronavirus variant during Christmas and New Year so that the government will not limit travel. During 2022 Eid transportation period, AP II successfully served 6 million passengers.
In the second quarter of 2022, AP II’s financial performance recovered, so the state-owned airport operator must boost their recovery process by carrying out new efforts to restructure their finances. At the end of 2022, AP II hopes that aviation will recover sooner. At Soekarno-Hatta Airport in Cengkareng, the recovery rate has reached 81% from before the pandemic.
Including other airports managed by AP II, he added that AP II’s recovery rate had reached around 69% to 71%.
PT Angkasa Pura I President Director Faik Fahmi was also preparing to benefit at the end of this year by anticipating the high demand during the Christmas and New Year period.
He explained that the company’s financial performance until October 2022 was still at a loss by up to Rp813 billion.
Faik is optimistic that the loss that must be borne by the company could be reduced as there were still two months before the end of this year. He hopes that AP I’s performance can log net profit in 2023.
“From the financial report until this October, cashflow and EBITDA are already positive, but we are still at a loss by up to Rp813 billion,” he said.
With the remaining time until the end of this year, AP II will optimise their effort to supress loss. “In 2023, we are targeting [the performance] to be positive,” he said.
In terms of the number of passengers per October 2022, AP I has surpassed the target in the work plan and budget (RKAP) in 2022.
The number of passengers at 15 airports until that period surpassed 43 million passengers or 5 million passengers more than the target this year that reaches 38 million passengers.
Approaching the end of this year, AP I’s performance will be boosted by the Christmas and New Year momentum.
“Until the end of October, [the number of passengers] has reached 43 million, so we forecast that, until December, the number can reach around 50 million passengers in one year, which is far above the RKAP,” he said.
He will calmly face 2023 as he has increased the passenger capacity at several of his managed airports during the pandemic.
Strategic partners
For example, he mentioned the increase in passengers at Yogyakarta International Airport (YIA), Banjarmasin, until Ambon. With the pandemic, AP I has changed their strategy in airport development by increasing airport movement by utilising strategic partners.
Strategic partners are expected to accelerate recovery not only in airport management, but also in asset utilisation around the airport.
The state-owned airport operator is currently considering the company’s assets that are clean and clear to cooperate with strategic partners.
For YIA, he stated that there was around 84 hectares of land that would be developed to be an aerocity.
“As the airport can accommodate large aircrafts with a wider runway. So, there are several explorations with foreign parties that are still in the exploration stage,” he explained.
In the 2023 RKAP, he stated that AP I had prepared a realistic strategy. According to him, one of the factors that carry weight in the long term and is significant is the impact of the war in Ukraine that impacts the price of jet fuel.
He is worried that the increase flight ticket prices will decrease the number of passengers.
“Hopefully, the condition is still good in 2023. The current condition is starting to recover from the pandemic, unless there is an extraordinary condition that we do not expect,” he emphasised.
