Indonesia: The number of air passengers in Indonesia is expected to grow around 30 percent year-on-year, to reach 140 million in 2018, increasing from approximately 108 million in 2017, according to Bintang Hidayat, airport director, Indonesia’s Transportation Ministry.
The country’s transportation ministry opened 83 new commercial flight routes last year, which includes 58 domestic routes and 25 international routes.
The Indonesian government is committed to opening new flight routes as it will enable the country’s remote parts to be more accessible, as well as strengthen international and regional transportation.
The country’s aviation industry has been growing with an increase in air passengers, flights and routes but it still faces several challenges, according to Bayu Sutanto, head of the scheduled flights division at the Indonesian National Air Carriers Association.
The Indonesian government determines the price ceiling of airfares to protect consumers’ purchasing power, and has not been quick in raising the price ceiling. This limits profits for airlines as operational costs have risen, inhibiting them from setting higher airfare prices.
Moreover, the increased number of flights places pressure on the capacity at airports in Indonesia. Inefficiencies might occur—which could prove dangerous—if an airport is unable to handle an increased volume of flights.
Mr Sutanto advises the Indonesian government to set up a new aviation agency with the task of monitoring the conditions at the airports across the country, including tariffs, infrastructure, connectivity and safety issues.
Indonesia’s aviation industry typically grows 2.5 times faster than its macroeconomic growth, added Mr Sutanto. The Indonesian government has targeted the country’s economic growth to increase 5.4 percent in 2018, which means the Indonesian aerospace industry is expected to grow 13.5 percent.