Call for low-cost airline terminal

In anticipation of a growing number of budget travellers, the Indonesian government must build a specific airport terminal with facilities dedicated to budget airlines, air service operators have said.

Data from Indonesia’s Transportation Ministry show the number of air passengers flying with low-fare airlines such as Lion Air, Indonesia AirAsia, Citilink Indonesia and Mandala Airlines reached almost 35 million in 2012. This represented 47 per cent of the market.

The figure is predicted to reach 55 per cent over the next few years, leaving the remaining share to the full- and middle-service segments.

Financial service giant Morgan Stanley said the low-cost carrier (LCC) market share in Asia-Pacific since 2004 had been growing at a historic annual growth rate of 11 per cent, pushing countries and stakeholders to create airports that could cater to the increasing LCC passengers.

“We need airport infrastructure to help us maximise our business, such as high utility of aircraft between 12 to 14 hours [a day] and a quick 25-minute aeroplane turnaround time. This would lower our operating costs, which could then be passed on as cost savings to passengers,” Indonesia AirAsia (IAA) commercial director Bernard Francis said. 

Terminal Three at Soekarno-Hatta International Airport in Cengkareng, Banten, is currently being expanded to increase capacity from 4 million to 25 million passengers. But the new terminal is not exclusively used by budget carriers as a new full-service airline, Batik Air, used the same terminal for its maiden flight in May.

Malaysia and Singapore have foreseen rising demand for low-cost airlines. Singapore’s Changi Airport Group recently started work on the airport’s new Terminal 4, which will be dedicated to low-cost carriers. It is expected to be operational by 2017.

“We understand that infrastructure requires a lot of investment, but this [LCC] model will translate into the growth of business and tourism in Indonesia, impacting the economy,” he said. 

He admitted that IAA had felt the pinch of poor airport infrastructure for the past few years, particularly at Soekarno-Hatta, and found it hard to obtain the additional slots that were essential for network expansion. 

Separately, Citilink Indonesia’s vice president for communications and marketing, Aristo Kristandyo, agreed with Francis, saying that the growing middle class hungered for air travel, requiring a new approach to airport development in the future.

“The number of middle-class Indonesians is projected to double in the next five years, meaning that we need to anticipate that growth by adding infrastructure. We believe that low-cost airlines can contribute to the economy if we are supported by such facilities,” he said.

He also said that dedicated LCC terminals should not only be built in Jakarta, but also major points across the country in order to create efficiency that would benefit passengers.

The Transportation Ministry’s air transportation spokesman, Israful Hayat, said the government was aware of the need for terminals and airports that were specifically designed for budget airlines.

However, he said comprehensive studies were still needed.

Meanwhile, state-owned airport management firm Angkasa Pura II (AP II), which oversees airports in the western half of Indonesia, said it had no plans to build dedicated LCC terminals or airports in the near future.

“LCCs are still a grey area in Indonesia because the price of their tickets is equal to full-service airlines during Lebaran and Christmas. We are now focusing on increasing the capacity of the congested airports that we manage,” said AP II president director, Tri S Sunoko.