Now the world’s largest air transport market, the Asia-Pacific region continues to register strong year-on-year traffic growth. Analysts forecast this rapid growth trend will continue, stimulated by the planned liberalisation of air travel and trade, as well as by increasing economic activity. But to keep up with the pace of the expected rise in demand, significant airport development is needed in all countries of the region.

One market seeing considerable growth, but lacking the infrastructure to cope with rising demand is Indonesia, the region’s largest economy, which has extensive plans to substantially invest in the development of its gateways. IATA named Indonesia as one of the top five fastest-growing markets for additional passengers over the next 20 years. The world’s fourth most populated country with more than 252 million people, Indonesia handled around 110 million passengers in 2013, but is set for huge growth over the coming years. IATA forecasts that by 2034 traffic will rise to about 183 million.

In April 2014, the Indonesian government revealed plans to build another 62 new airports over the next five years, primarily in the eastern regions, to bring the total of commercial gateways to 299. Airports in the east are operated by state organization PT Angkasa Pura I, and PT Angkasa Pura II operates those in the west. The country’s small airports are operated by UPT, part of the Indonesian Directorate General of Air Transportation.

East Indonesia

PT Angkasa Pura I operates 13 airports in Eastern Indonesia, and has allocated more than $590 million for the expansion of the five airports it runs – Denpasar Bali, Balikpapan, Semarang, Surabaya and Makassar – all of which are operating above their design capacity.

A key development will take place at Surabaya Juanda, planned for implementation over the next two to three years. The gateway in East Java handled 17.6 million passengers in 2013, well above its 12 million capacity. It still needs urgent attention despite Terminal 2 being opened in 2014, where national carrier Garuda Indonesia is based.

To meet future traffic demand at the airport, which is expected to be around 40 million by 2018, the operator is considering an additional three runways as well as developing passenger facilities. Meanwhile, expansion was completed in June 2014 at one of the country’s most important gateways, Denpasar Bali, where the bulk of the traffic is tourists. The development raised the capacity to 25 million, and included increasing the size of the terminals and extending the apron to handle more widebody aircraft. Plans are also afoot to build a hotel on the site.

Semarang in Central Java, which handled 3.2 million passengers in 2013, will also be upgraded and the green light has been given to a $93 million development to double the capacity to 10 million. Also in need of a revamp is capacity stretched Makassar, which welcomed 9.6 million travellers in 2013 despite only having room for 7 million. It is expected to see 13 million visitors within the next five years so a fund of $79 million has been allocated for development to allow it to handle increased demand.

Yogyakarta Adisucipto has also reached saturation point after strong growth. PT Angkasa Pura I and its partner, India’s GVK Power & Infrastructure, have applied to the regulator to build a new hub for the city, to be called Yogyakarta Kulonprogo International Airport. The limited availability of land and dense population around the existing gateway prevents further expansion.

Also under consideration is a new airport in Kubutambahan in the north of Bali, to be called Bululeng. An expression of interest has been received from local company PT Pembangunan Bali Mandiri, and Canada-based Kinesis Consulting, and feasibility studies have been prepared. At Balikpapan, which handled 7.1 million passengers in 2013, and where a new terminal was opened in March 2014, plans have already been outlined to extend the runway to 3,250m to handle widebody aircraft, and to build a hotel on the site.

West Indonesia

In the west of the sprawling archipelago, the state organization PT Angkasa Pura II operates and manages 13 airports, which between them handled a total of 86.3 million passengers in 2013. These include both airports in the capital Jakarta, and Medan Kualanamu, in the busy city of Medan in northern Sumatra. The country’s busiest Jakarta gateway, Seokarno-Hatta, last year handled some 60 million passengers.

Demand continues to increase and despite constant upgrades it is operating above capacity. Expansion is ongoing and the new Terminal 3 will be fully operational by the end of 2015, and be able to handle 18 million passengers per annum (mppa). Terminal 2 will also be transformed and once ready, able to accommodate 19mppa. Development work is set to continue and the government’s transportation ministry has set aside funds for a third runway, along with a Terminal 4. Construction could start as early as 2016. This will raise the capacity to 62 million, bringing the total cost of the expansion to around $985 million. Further revamps will be needed. A new gateway is set to be built in West Java, to ease the pressure on Jakarta Soekarno-Hatta. Karawang International Airport will be built 50km east of Jakarta and will be funded in a public-private partnership (PPP) format.

The west has also seen a new gateway built at Medan Kualanamu, now the second largest airport in Indonesia by area. This opened in July 2013 but has already exceeded its capacity of 8mppa, handling 8.3mppa, and will need to be further developed. Plans are in the pipeline to increase the capacity to 14mppa by 2025 with the enhancement of facilities across the airport site.

Dealing with demand

Air traffic demand in Indonesia continues to grow at a rapid pace. More low-cost airlines are entering the market, tourism figures are on the rise and the country’s middle-class continues to increase in size. Though a raft of airport infrastructure projects are in development or awaiting approval, it seems a lot more government capital investment programmes, and PPPs, will be needed to cope with the forecasted traffic numbers.