JAKARTA (TheInsiderStories) - The Indonesian National Air Carriers Association (INACA) sees that the growth of domestic airline passengers to reach between 10 to 15 percent in 2016 or almost same with estimated 2015’s growth of 15 percent, partly driven by the scrapping of import duties on aircraft components, maintenance and spare parts in the government’s stimulus packages as well as the implementation of the ASEAN Economic Community (AEC).
INACA Chairman Arif Wibowo, said that the beginning of the ASEAN Open Sky from Jan. 1, 2016 is believed to bring more opportunities for national airlines. For the record, Indonesia opens five airports for the ASEAN Open Sky program, namely Kualanamu Airport in Medan, Soekarno-Hatta in Jakarta, Juanda in Surabaya, Ngurah Rai in Bali, and Sultan Hasanuddin in Makassar.
He said that it would have a significant impact on airlines in the country as maintenance costs are made up of between 10 to 15 percent of their total operational costs. According to him, the regulations would also put the country in a similar playing field with other ASEAN countries with the effeciveness of the ASEAN Open Sky policy.
Last year’s passengers growth were encouraging, with the total number of passengers between January and October increased by 12.75 percent, larger than the same period in the previous year, according to Central Statistics Agency (BPS) data.
Arif Wibowo, who is also President Director of Garuda Indonesia, also said that the anticipated economic higher growth this year would boost airline industry after the sluggish growth last year. INACA division head for scheduled airline Bayu Sutanto said that the growth also depended on the continuing development of infrastructure, such as airports and navigation equipment, this year.
The Transportation Ministry aims to start construction of new airports in 15 cities as well as extend runways in 30 locations this year, according to Transportation Ministry data. Last year, the ministry started building 17 airports and extended runways in 35 airports.
Arif urged the country’s airlines to expand their routes within Indonesia, especially to eastern areas, to establish a strong backbone of connectivity inside the country to anticipate the entry of foreign airlines with the Open Sky policy.
He added that airlines had ventured into airports in less central locations in a bid to expand their reach. (*)