Indonesia big enough for LCCs – Garuda chief

Indonesia big enough for LCCs – Garuda chief

But country's infrastructure is becoming major impediment to growth

But country's infrastructure is becoming major impediment to growth

Emirsyah Satar at the AAPA Assembly of Presidents
Emirsyah Satar at the AAPA Assembly of Presidents

The Indonesian aviation market is big enough to accommodate the country’s fast-expanding low-cost carriers, the president of national carrier Garuda Indonesia has said.

According to a recent Amadeus report, LCC capacity at Jakarta’s Soekarno-Hatta Airport has jumped 44% in the past 12 months, while carriers like Lion Air are placing huge orders for new aircraft.

But speaking at the AAPA Assembly of Presidents in Hong Kong on Friday, Garuda’s president & CEO Emirsyah Satar, told a panel discussion that while Indonesian LCCs are expanding rapidly, they are only keeping pace with rising demand, especially in the domestic market.

“The Indonesian market is growing,” Satar said. “For about the last five years passenger traffic has been seeing double-digit growth.”

And this growth, according to Satar, is being driven by a rising number of Indonesians switching from ferry, road and rail transport to air. “LCCs are bringing in people from other modes of transport, such as boat or train. They are not just taking other airline business. The pie is big enough.”

But while the Garuda chief appears not to be feeling pressure from his rivals, he acknowledged that the major challenge for Indonesian aviation is infrastructure. “We need to expand Jakarta airport,” he stated.

This view was echoed at the conference by AAPA director-general Andrew Herdman, who said that Indonesia’s infrastructure presented a “challenge” for the country.

“It doesn’t matter how many new aircraft you buy; if you don’t have the infrastructure it’s a brick wall,” he said.

Garuda and its low-cost subsidiary Citilink are planning to add more than 120 new aircraft to their combined fleet in the coming years. Meanwhile, its Jakarta-based rival Lion Air has outstanding orders for more than 500 aircraft, although not all of these will be deployed within Indonesia.

 

 

Mark Elliott
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Mark Elliott
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