In Indonesia, it’s too late. After years of governmental inaction, the country’s airports are heavily saturated, and expansion plans will not be enough. Airlines are still growing fast, trapping Indonesia in a vicious circle. The economy is booming on this tiny archipelago of 17000 islands. Air transport is nothing less than the only solution, and fast-competing airlines brought domestic air traffic's growth to a whopping 20% in 2012. While some emerging countries manage growth well, others don’t.
Behind the amazing success of booming airlines, another reality comes up: Jakarta's Soekarno-Hatta International Airport. It handled 58 million passengers in 2012, but it was only designed for 22 million passengers. This represents a 163% overcapacity that as you will see, sums up pretty well the situation of airports in Indonesia.
Failure to Improve Airport Infrastructure
Indonesia is one of the four Tiger Cub booming economies and the 4th most populous country in the world. Although more than half of its inhabitants are still living on less than 2 US Dollars a day and less than 15% of them have already boarded an airplane, 141 million of the 250 million inhabitants will belong to the middle class by 2020.
With economic growth rates never lower than 6% since 2004, a rough land made of mountains and islands that make “land travel not an option in most cases” according to the state-owned airport operator, aviation has been ineluctably surging over the past decade. Indonesia growth rates are among the world's highest which led infrastructure projects to be overtaken too quickly even though the government increased their transport infrastructure budget to 53 billion US Dollars.
Huge Airline Growth, Orders and Deliveries
Indonesia’s biggest carrier Lion Air Group is the most visible sign of the extreme and unstoppable growth of the Indonesian aviation market. It will add 48 airplanes to its 94 plane-fleet this year, allocating 28 brand-new Boeing, Airbus and ATR aircrafts to the Indonesian market. The airline’s backlog says it all: after ordering in 2011 230 single-aisle jets with 150 options in what was Boeing’s biggest order at that time, 234 Airbus jets were piled up last year, bringing the total to a huge 550. Lion Air Group takes delivery of 40 to 60 jets per year, and should keep doing so for at least the coming decade. Its main low cost subsidiary Lion Air is the most aggressive but Lion Air also owns Lion Wings and Batik Air in Indonesia.
Its main competitor, state-owned national airline Garuda competes as a full service carrier and with its low cost subsidiary Citilink. It has even grown faster than the low cost carrier Lion over the past three years, reaching an amazing 36% passenger growth in 2011. Garuda has a 110-airplane backlog but is likely to order up to 250 jets this year. Other competitors include Indonesia Air Asia, subsidiary of the renowned Malaysian low cost carrier, and Sriwijaya Air.
Such growth rates have thrilled the airlines and the manufacturers, although they completely changed the airports' landscape: they are not able to grow that fast.
Soekarno-Hatta Expansion Plans
Soekarno-Hatta Airport is the main hub of the 28 million-inhabitants capital, and ranks 10 among the world’s busiest airports. The busiest airport in South-East Asia and third Asian Airport was handling 38 million in passengers in 2008 – when it took over Singapore airport. In other words, it doubled in 5 years, but it did not double its capacity. The airport has never really been extended, and projects to do so always got delayed or cancelled.
The expansion process has only been started in 2012, and should be completed in 2015, raising capacity to 62 million passengers per year via the expansion of the three terminals. Other plans including a third runway and a fourth terminal that could allow Soekarno-Hatta to handle 87 million passengers are also in the pipeline.
Jakarta’s 2nd Airport: Halim Perdanakusuma
Jakarta is as it has been for years: crowded. Its very limited capacity of 22 million passengers (the number of travelers it handled in 2007, seven years ago!) had to be overcome urgently. Earlier last year, authorities allowed Jakarta’s 2nd airport Halim Perdanakusuma Airport to be reopened to civil flights. Halim Perdanakusuma Airport would be able to handle roughly 5% of Soekarno-Hatta Airport in terms of air movements, or in other words, 4 months of Soekarno's growth!
Insufficient Expansion for Jakarta
Let’s face it, one single airport in Jakarta will not solve everything, and the capital of the 5th largest aviation market in the world must be provided with another airport.
“We realize that this expansion is not enough, because the number of passengers keeps increasing every year" admitted the vice president of the state-owned company ruling most Indonesians airports.
The busiest airport in the southern hemisphere has been growing fast for years, overtaking Dubai but being overtaken by Istanbul with a 15% year-to-year traffic growth in 2012, and taking into consideration that the population is getting richer, the economy is improving and airlines have hundreds of airplanes to be delivered, it should keep doing so at least for the coming decade.
Jakarta, despite hosting the busiest airport in South-Eastern Asia, is not really a hub, since 3/4 of its traffic comes from domestic flights, and more than 90% of the flights are operated by unaligned carriers. That all changed last March 2014 when Garuda joined Skyteam, which accounts for roughly 30% of Jakarta Soekarno’s traffic. Therefore, having 2 airports in Jakarta would perfectly make sense. Furthermore, airlines are actively developing point to point flights, which help in avoiding the most crowded airports.
The situation in Jakarta is terrible but seems to be evolving since the expansion process is progressing. Nevertheless, this may be too late. The expansions planned will not bring enough room, and if the growth stays as high as it is, the enlarged buildings will be as crowded when the renovation is completed, as they are now, even if they are delivered on time.
This post is part of a new series called Generation Y, where we invite aspiring aviation professionals to contribute. This is part 1 of 2.
References Southeast Asia low-cost airline fleet to expand by almost 20% in 2014 Indonesia's Lion Air Orders 234 Jets From European Plane Maker (you need to be registered to access) Garuda Indonesia aims to order 200-250 aircraft from 2014 -CEO Soekarno-Hatta Airport Expansion Kicks Off Indonesia poised for more rapid domestic growth in 2013, driven by low-cost carriers
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