BOOM TIME!

Air traffic in Indonesia is growing at such a pace that the nation’s airports are struggling to cope, writes Justin Burns.

According to IATA, Indonesia will be among the top five fastest growing aviation markets over the next 20 years.

Already the world’s fourth most populated country with more than 238 million people, Indonesia is set for huge passenger growth over the coming years.

Indeed, IATA forecasts that close to 300 million passengers will use the country’s airports in 2034 – an incredible 180 million more than today. 

Aware of the need to boost capacity in order to meet future demand, the Indonesian government has revealed plans to build 62 new airports over the next five years. The new additions will effectively give the country 300 commercial gateways spread across 17,508 islands straddling South East Asia and Oceania.

Plans are in hand to develop public-private partnership (PPP) schemes for 10 airports, with expressions of interest elicited for the three deemed the most attractive to private investment – Bandar Lampung Radin Inten II, Labuan Bajo Komodo and Palu Mutiara.

The other seven on the government’s list are Bengkulu Fatmawati Soekarno, Jayapura Sentani, Matahora, Palangkaraya Tjilik Riwut, Tanjung Harapan, Tarakan Juwata International and Ternate Sultan Babullah.

East Indonesia

PT Angkasa Pura I operates 13 airports in Eastern Indonesia, and has allocated more than $590 million for the expansion of the five airports it runs – Denpasar Bali, Balikpapan, Semarang, Surabaya and Makassar – all of which are operating above their designed capacity.

A key development will take place at Surabaya Juanda, planned for implementation over the next two to three years. The gateway in East Java handled 17.6 million passengers in 2013, well above its 12 million capacity. It still needs urgent attention despite Terminal 2 being opened in 2014, where national carrier Garuda Indonesia is based.

To meet future traffic demand at the airport, which is expected to be around 40 million by 2018, the operator is considering an additional three runways as well as developing passenger facilities.

Meanwhile, expansion was completed in June 2014 at one of the country’s most important gateways Denpasar Bali, where the bulk of the traffic is tourists. The development raised the capacity to 25 million, and included increasing the size of the terminals and extending the apron to handle more widebody aircraft. Plans are also afoot to build a hotel on the site.

Semarang in Central Java, which handled 3.2 million passengers in 2013, will also be upgraded and the green light has been given to a $93 million development to double the capacity to 10 million.

Also in need of a revamp is capacity-stretched Makassar, which welcomed 9.6 million travellers in 2013 despite only having room for seven million. It is expected to see 13 million visitors within the next five years, so a fund of $79 million has been allocated for development to allow it to handle increased demand.

Yogyakarta Adisucipto Airport has also reached saturation point after strong growth. PT Angkasa Pura I and its partner, India’s GVK Power & Infrastructure, have applied to the regulator to build a new hub for the Indonesian city. 

Also under consideration is the new Bululeng Airport in Kubutambahan, north of Bali. An expression of interest has been received from local company PT Pembangunan Bali Mandiri, and Canada-based Kinesis Consulting, and feasibility studies have been prepared.

At Balikpapan, which handled 7.1 million passengers in 2013, and where a new terminal was opened in March 2014, plans have already been outlined to extend the runway to 3,250m to handle widebody aircraft, and to build a hotel on the site.

West Indonesia

In the west of the sprawling archipelago, the state organisation PT Angkasa Pura II operates and manages 13 airports, which between them handled a total of 86.3 million passengers in 2013. 

They include both airports in the capital Jakarta, and Medan Kualanamu, in the busy city of Medan in northern Sumatra.

The country’s busiest gateway, Jakarta’s Seokarno-Hatta International Airport, handled some 60 million passengers last year and demand continues to increase, and despite constant upgrades, it is operating above capacity.

Expansion is ongoing and the new Terminal 3 will be fully operational by the end of 2015, and be able to handle 18 million passengers per annum (mppa). 

Terminal 2 will also be transformed and once ready, able to accommodate 19mppa. Development work is set to continue and the government’s transportation ministry has set aside funds for a third runway, along with a Terminal 4. Construction could start as early as 2016.

This will raise the capacity to 62 million, bringing the expected total cost of the expansion to around $985 million. However, further revamps are likely to be needed.

Elsewhere, a new gateway is set to be built in West Java, to ease the pressure on Jakarta Soekarno-Hatta. Karawang International Airport will be built 50km east of Jakarta and will be funded in a public-private partnership (PPP) format.

Dealing with demand

Air traffic demand in Indonesia continues to grow at a rapid pace. More low-cost airlines are entering the market, tourism figures are on the rise and the country’s middle-class continues to increase in size.

Though a raft of airport infrastructure projects are in development or awaiting approval, it seems a lot more government capital investment programmes, and PPPs
will be needed to cope with the forecasted traffic numbers.

IATA’s rallying call

IATA has called on Indonesia’s stakeholders to partner in the development of an aviation master plan based on global standards to ensure that the country is served by an aviation industry performing at its best.

It has identified three potential elements to be addressed in the master plan: improving safety, ensuring capacity and a smart regulation framework.

IATA’s director general and CEO, Tony Tyler, commended the Indonesian government for its plans to expand the nation’s airport infrastructure, but warns the even more needs to be done if future demand is to be met. 

“Indonesia needs a hub. The most efficient solution is to maximise the potential of one airport – Soekarno Hatta – where significant investment has already been made,” suggests Tyler.

According to the IATA chief, Soekarno-Hatta has the possibility to grow. There is plenty of land and the basic runway structure is relatively efficient. But he believes that the terminal areas will need a major re-development.

“The vision would be something like the super-terminals that we see in Beijing, Hong Kong or Incheon,” he says.

“By starting from scratch and working in close consultation with the airlines I am confident that we would achieve a world-class facility designed around key new technological innovations such as those in the IATA Fast Travel programme or the new risk-based process innovations that Smart Security is developing.”