Indonesia Aviation

The Indonesian aviation sector offers significant opportunities because it is the largest in Southeast Asia, as Indonesia’s population comprises 41% of Southeast Asia’s total population. With Indonesia being an archipelago of more than 17,000 islands, air travel is necessary for the mobility of both people and goods. Current challenges include a lack of infrastructure for the rapid development of the aviation industry as well as the government’s management of its human resources to meet market demands.

The domestic aviation industry was hit hard during the COVID-19 pandemic. According to the Indonesian National Air Carriers Association (INACA), Indonesia’s aviation industry continues to recover as passenger figures have reached 80 percent of the pre-pandemic level. Airlines are confident about the demand trajectory after air travel picked up rapidly. Data from the Indonesian Bureau of Statistics (BPS) recorded 7.1 million international airline passengers and 52.6 million domestic passengers, an increase of 1,030% and 75% percent, respectively, from the previous year. 

Angkasa Pura I (AP I) and Angkasa Pura II (AP II)

Angkasa Pura I, which operates 15 airports mainly in Eastern Indonesia, recorded that it had served 6,245,286 passenger movements throughout May 2023, a growth of 27% compared to the May 2022 period. The number of passenger movements for May 2023 is also the highest monthly passenger movement figure since the start of the global Covid-19 pandemic. The trend appears to be sustained, with AP I experiencing a 49% increase in passenger movements from January to May 2023 compared to the same period in 2022.  Growth also occurred in the number of aircraft movements, with an increase of 4% compared to May 2022. Meanwhile, for cargo movements, 15 Angkasa Pura Airports served 464,326 tons of cargo and saw a 7% increase compared to 2021. 

PT Angkasa Pura II, which operates many airports in Western Indonesia, also saw increased passenger and aircraft movements on the order of 30-50% compared to 2022. The domestic cargo market at the AP II airports continues to recover and exhibits growth above pre-pandemic levels.

Indonesia’s under-developed public infrastructure presents significant opportunities for U.S. companies operating in the aviation industry. The country’s aviation sector is the second-fastest growing in the world and favors U.S. products. Aircraft replacement parts and services are a valuable and significant market.  Additionally, Indonesian airports are already heavily burdened and the increasing growth in air traffic, investments, and developments in new airports closest to tourist destinations, the refurbishment of existing airports, construction and improvements to ground infrastructure, runway, and air traffic systems are all promising areas for future growth which are present opportunities for U.S. companies to pursue.

For additional information, please contact: Kalung Riang at (Kalung.Riang@trade.gov)