The only way to efficiently travel throughout the archipelago of Indonesia is by air. There are more than 17,000 islands that are part of this nation. The Indonesian aerospace industry provides services over the 5,200 kilometers in width and 2,000 kilometers in length between the furthest island points.
The aerospace industry has its roots in a 1937 pre-independence effort by a group of youth who wanted to build an aircraft in their Bandung workshop. They built a PK.KKH aircraft that was able to fly as far as the Netherlands. It wouldn’t be until 1976, however, when the Indonesian aerospace industry would be officially licensed and certified to operate globally.
Certain sectors of the aerospace industry are currently closed to investment. Other sectors have foreign investment caps at 49% or 67% maximums, with a stipulation that the national investment levels in Indonesia must be bigger than foreign investment.
Interesting Indonesian Aerospace Industry Statistics
#1. As of 2015, there were a total of 269 airports operating in Indonesia. 26 of those airports were classified as commercial airports in large cities, operated by state-owned management services. (EU Indonesia Business Network)
#2. Growth forecasts for the Indonesian aerospace industry are up to 9% annually. This is because the growth of domestic and international passengers is forecast to increase by 72% for the 5-year period ending in 2020. (EU Indonesia Business Network)
#3. The Indonesian aerospace industry regularly serves over 80 million domestic passengers annually and 14 million international passengers. (EU Indonesia Business Network)
#4. The largest fleet within the Indonesian aerospace industry is owned by Lion Air, with about 190 aircraft in ownership as of January 2016. Garuda owns 179 aircraft at the time of this census, while Air Asia an Sriwijaya own a combined 70 aircraft. (EU Indonesia Business Network)
#5. The total market size for Indonesia’s aviation imports was $4.58 billion in 2012. In 2014, that dropped to just $536 million. That is due to a dramatic drop in imports coming from the United States. (EU Indonesia Business Network)
#6. Every year, there are more than 74,000 international arrivals and departures that are serviced by the Indonesian aerospace industry. These figures are about 20% below industry peak levels, achieved in 2014, when more than 100,000 international arrivals and departures were serviced by the industry. (EU Indonesia Business Network)
#7. The Indonesian aerospace industry also handles more than 400,000 domestic arrivals and departures each year. In 2014, more than 800,000 domestic departures and arrivals were serviced by the industry. (EU Indonesia Business Network)
#8. In 2016, there were 89.3 million passengers served by the Indonesian aerospace industry. That was a 16.6% increase over the number of passengers served from the year before. In comparison, maritime transportation increased by just 0.5% over the same period. (International Trade Administration)
#9. In 2016, there were 19 aircraft accidents reported by the industry, along with 26 serious incidents reported. (International Trade Administration)
#10. PT Air Navigation Indonesia, which is a state-owned enterprise, was given a budget of $59.3 million to improve flight security systems. (International Trade Administration)
#11. The potential MRO market (maintenance, repair, and overhaul) for the Indonesian aerospace industry is forecast to reach a total value of $65.3 million by the year 2020. (International Trade Administration)
#12. 20% of the design engineering team employees that work with the industry are women. Most are involved in system analysis, design, or structure analysis. (Jakarta Post)
#13. The Lion Group has a target to order as many as 1,000 aircraft that can be operated in and around the APAC region. (EU Indonesia Business Network)
#14. Garuda Group has a target to order up to 250 new aircraft to modernize their fleet and improve service qualities by 2025. (EU Indonesia Business Network)
#15. In the Q1 2016, the air cargo industry in Indonesia grew by a total volume of 7%. This resulted in over 185,000 tons of air cargo being shipped. At the same time, airports under state controls saw air cargo increases of 5% during the same period. Total volumes are expected to remain above 1.5 million tons annually. (EU Indonesia Business Network)
#16. Garuda Indonesia Cargo dominates the air cargo segment of the aerospace industry. In 2014, they held a 51% market share. By March 2016, they were able to increase their load factors by nearly 50%. (EU Indonesia Business Network)
#17. CardigAir is another major contributor to the air cargo segment. They manage 6,000 tons of cargo annually, producing an income of $20 million per year. (EU Indonesia Business Network)
#18. What keeps the Indonesian aerospace industry from achieving its full potential is a lack of qualified MRO organizations. Almost all MRO companies within the industry are not approved by U.S. or European aviation safety agencies. Only 5 are currently approved. (EU Indonesia Business Network)
#19. The national MROs in Indonesia are only able to control about 30% of all total available aircraft maintenance. About 80% of domestic MRO is performed by GMF AeroAsia. The remainder is handled by international companies. (EU Indonesia Business Network)
#20. The number of available qualified technicians in Indonesia is about 400 people per year. The current demand for qualified technicians within the industry is closer to 5,000 people per year. (EU Indonesia Business Network)
#21. The MRO segment can be divided into a value of $160 million for turboprop craft and $680 million for jet aircraft, based on 2015 figures. (EU Indonesia Business Network)
Indonesian Aerospace Industry Trends and Analysis
Because of the spacing of the islands and a need for reliable air travel, by 2034, Indonesia is forecast to become a Top 6 market for air travel. More than 270 million passengers may utilize the services of this industry over the course of the next generation.
There is the potential for the aerospace industry to grow at rates as high as 20% per year. That is due to the large market for maintenance services, replacement part manufacturing, and airport development and construction.
In 2017, the governing cabinet in Indonesia agreed to prioritize 5 sectors. Aviation was included within the infrastructure development program. New tourism-related airports are scheduled for construction. The Directorate of Civil Aviation received a total budget of $685 billion in 2017, to help with growth and modernization.
In the next 20 years, the Middle Class in Indonesia with disposable income levels that permit aircraft travel is expected to increase by more than 110 million people. When international passenger movement growth levels of 15% are factored into these figures as well, the Indonesian aerospace industry is poised to grow stronger and wealthier in 15 years or less.
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