Aviation Sector and Open SkiesChris Whittle

IndII Wrap-up Conference14th June 2011

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Aceh to JayapuraAceh to Jayapura5,000km5,000km5 hrs 40 min5 hrs 40 min

Los Angeles to New YorkLos Angeles to New York3,950km3,950km4 hrs 30 min4 hrs 30 min

London to JeddahLondon to Jeddah4,730km4,730km5 hrs 25 min5 hrs 25 min

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Major Player On World Aviation Stage

• World’s 17th largest economy with rapidly growing middle class

• Strong demand growth• Jakarta largest and fastest growing

airport in ASEAN• Indonesian airlines increasing fleets• New capacity planned at main

international airports

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Demand Growth + Forecast (Indonesia)

0

50

100

150

200

250

300

350

400

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Pas

sen

ger

s p

er a

nn

um

(m

n)

Domestic Passengers International PassengersSource: Mott MacDonald Forecast

ForecastActual

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Growth of Jakarta

0

5

10

15

20

25

30

35

40

45

50

JAKARTA SINGAPORE KUALA LUMPUR BANGKOK

(Pas

sen

ger

s (m

n)

2005 2006 2007 2008 2009 2010

AAGR: 9.2% AAGR 5.3% AAGR 7.9% AAGR: 1.9%

Source: ACI

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Aircraft Orders

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50

100

150

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2011 2015

Fle

et S

ize

Garuda Indonesia Lion Air Indonesia Air Asia Sriwijaya Wings Air Merpati Batavia

Total Fleet: 276 Total Fleet: 521

Source: ATI Online

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New Airport Capacity

• Jakarta Airport: Masterplan in progress• Medan: new airport• Bali: new international passenger

terminal• Balikpapan: new international

passenger terminal

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Implementation of ASEAN Open Skies Policy• Goal

A strategy for implementation of regional (ASEAN) Open Sky policy in 2015 (planned date)

• Objectives Accommodate ASEAN Open Sky policy in national aviation

law Prepare national aviation industry for regional competition Assess the benefits of ASEAN Open Sky policy for Indonesia

• Deliverables Road map for the development and implementation of the

ASEAN Open Sky Policy in Indonesia in 2015 (planned date) Detail steps to be taken by the “implementers”, including

the government, carriers and airport operators

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Description of Activity Components

Interdependence of the tasks

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Open Skies Benefits• Benefits significantly outweigh costs:

Additional 16.3m international passengers; 99,000 aircraft movements; 291,000 tonnes of air cargo in 2025

Baseline impact (2010): 243,000 jobs and GDP IDR 33.7 trillion

2025: 505,000 jobs and IDR and GDP 117.7 trillion

Positive net flow of costs and benefits to Indonesian users - Net Present Value of IDR 21.9 trillion and Benefit Cost Ratio of 5.4

• Most benefits accrue to Jakarta and other larger airports

• Benefits could be greater by extending scope of Open Skies

• Strong case for a more liberal approach towards the development of air services with other world regions.

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Other Aviation Projects

• Indonesia Air Traffic Management Masterplan A strategic road map for development of

future Air Traffic Management requirements

• Bali Airport Development options Opportunities can be realised in short

/medium term from optimumuse of existing terminal and runway infrastructure.

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Opportunities (1)

• Implementation of Open Skies• Infrastructure bottlenecks:

– National Airports Masterplan– Optimise existing terminal and airside

infrastructure (Bali example) – Upgrade surface access to airports

• Development of human resources • Align air transport with development of

economic corridors

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Opportunities (2)

• Reduce impact of peripherality• Airline compliance and conformity