Singapore Airlines (SIA) will significantly boost Indonesia services from July this year, with the introduction of daily flights to Surabaya, and an increase in frequency to the capital Jakarta and the resort island of Bali. Its regional subsidiary SilkAir will also introduce a new link to Semarang and resume flights to Makassar as the two sister business readjust capacity to meet with passenger demand.

The new SIA operated flight between Singapore Changi and Surabaya, the second-largest city in Indonesia and the capital of East Java will see the carrier takeover the operational responsibility of one of the two daily rotations currently offered by SilkAir on the route. The change and the introduction of a widebodied, 285-seat Airbus A330 will see combined SIA and SilkAir capacity on the route by 48 per cent.

At the same time as this flight switch, SIA will introduce a ninth daily service to Jakarta, and will simultaneously add its fourth daily service to Denpasar (Bali). SIA currently operates 56 weekly Jakarta flights – more than to any other destination in its network - and 21 weekly Denpasar flights. SilkAir currently operates 60 weekly fights to nine Indonesian destinations and in July and August will launch services to two more points. The carrier will launch a three times weekly link from Singapore Changi Airport to Semarang, the provincial capital of Central Java, from July 29, 2013, and resume services to Makassar, the provincial capital of South Sulawesi, with a three times weekly flight from August 1, 2013.

SilkAir will operate the two new routes with a mix of Airbus A319 and A320 equipment. It first began operations to Indonesia in August 1992 and has steadily strengthened its network over the years and is now flying to Balikpapan, Bandung, Lombok, Manado, Medan, Palembang, Pekanbaru, Solo and Surabaya. “We are impressed with the growth of air travel to and from Indonesia and we are confident that the two new services will be well received,” said Leslie Thng, Chief Executive Officer, SilkAir.

As the largest city of Central Java, Semarang is a commercial centre with an economy primarily anchored on trading, manufacturing and construction. A major port during the Dutch colonial era, Semarang also boasts a unique combination of European influences and rich Asian culture and retains a mix of old-world charm and colourful culture.

SilkAir will compete directly with AirAsia Indonesia on the link to Singapore bringing the first true competition to the route for a number of years. Garuda Indonesia had previously flown the route between May 2004 and June 2009 and then Batavia Air from March 2010 until it suspended operations on January 31, 2013. Existing operator AirAsia Indonesia is a relative newcomer to the market having only launched its own services in December 2012.

In 2012 an estimated 93,000 bi-directional O&D passengers flew on the route between Singapore and Semarang. This represented a 37.5 per cent increase on the traffic levels the previous year. Despite the services of Batavia Air throughout 2012 a significant number of passengers, estimated at around 48 per cent of the total traffic, flew on indirect services between the two destinations, suggesting a need for additional non-stop capacity.

Meanwhile, SilkAir is returning to Makassar, once again establishing direct air services between the city and Singapore. Makassar, formerly known as Ujung Pandang, is the largest city in East Indonesia and also the primary port and airline hub of the eastern archipelago. It is home to many of Indonesia’s ethnic groups including the Bugis and offers a multitude of historical gems, natural attractions as well as a variety of sightseeing opportunities within and beyond the city.

SilkAir previously served the route between November 2011 and April 2012 when Garuda Indonesia was also present in the market. However, after SilkAir ended its own flights the Indonesian flag carrier followed shortly after and since July 2012 there have been no direct air services between the cities. In 2012 an estimated 55,000 bi-directional O&D passengers flew on the route between Singapore and Makassar, up 19.6 per cent on the previous year.

“The Indonesian economy is growing and this has increased demand for both business and leisure travel,” said Ms Lee Wen Fen, Acting Senior Vice President Marketing Planning, Singapore Airlines. “Indonesia is an especially important market for the SIA Group, as demonstrated by SIA’s new services to Surabaya, our additional flights to Bali and Jakarta, and SilkAir’s new services to Semarang and Makassar. These new flights will provide even more options to our customers for travel to and from Indonesia, as well as for travel beyond Singapore to the many other destinations in our global network.”

In 2012 an estimated 5.73 million bi-directional O&D passengers flew between destinations in Singapore and Indonesia. In the table below we highlight the ten largest O&D markets between the two countries last year and how traffic has changed over the past few years. Total O&D demand between the two countries was up 13.3 per cent in 2012 versus the previous year with strong growth across all top ten Indonesian markets from/to Singapore Changi, most notably Pekanbaru (up 63.0 per cent) and Bandung (up 101.3 per cent).

Over the past five years total point-to-point air traffic demand between Singapore and Indonesia has almost doubled from 2.93 million passengers in 2007 to 5.73 million last year. The growth in low-cost air travel across Asia has certainly played a major role in developing this market with AirAsia Indonesia holding a dominant 23.3 per cent share of the demand last year, followed by SIA (17.0 per cent), Lion Air (15.5 per cent), Garuda Indonesia (14.0 per cent), Valuair (7.1 per cent) and then SilkAir (6.8 per cent).