Jakarta Globe, Denverino Dante, Feb 08, 2015
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| Renderings of Bintan Airport, Indonesia's first privately owned airport, set to open in the end of 2016 (Photo courtesy of Bintan Aviation Investments) |
From
Jakarta to Jambi and Pontianak to Pangkalpinang, Indonesian cities have
experienced tremendous growth in recent years. Unfortunately the airports of
these and other cities in the archipelago have been slow to keep up with
demand, and are now suffering from overcapacity.
This is not
just due to local demand. The introduction of the Association of Southeast
Asian Nations (Asean) Open Skies policy is certain to trigger more passenger
traffic within the region. This issue must be addressed as airports not only
serve to move people, but also contribute to growth.
An example
is New Zealand’s Auckland Airport, which served 14 million passengers in 2013
and contributed close to $15 billion, or 19 percent of the country’s gross
domestic product.
Virtually
all of Indonesia’s airports are government-owned. But a law governing aviation,
passed in January 2009, sets out how the private sector can participate in the
development of airports in Indonesia. In May last year, airports were taken off
the “negative investment list,” allowing foreign companies to own up to 49
percent of airport ventures.
Theoretically,
the government has opened the door for the private sector to participate in
airport development. Unfortunately these changes are yet to stimulate interest
from the private sector.
Each
proposed airport project has its own specific challenges, ranging from return
on investment issues to land acquisition problems. Lion Air has set out plans
to build its own airport in Banten province but no specifics have been
announced.
However,
one company is set to take on the challenge. Bintan Aviation Investments (BAI),
a subsidiary of Singapore-based publicly listed Gallant Venture, which in turn
is backed by the Salim Group and Singapore’s Sembcorp, will create Indonesia’s
first privately owned airport.
Once
completed, the new airport will be able to accommodate wide-body aircraft such
as the Airbus A330 and Boeing’s 747 and 777 models.
Located in
the Bintan Industrial Estate on Bintan Island, Riau Islands province, the first
phase of the airport will include three hangars, a three-kilometer runway and a
terminal. The company has set aside $135 million for this first phase.
The airport
is set to open at the end of next year, with plans to serve a million
passengers in its first year of operation. The company has ambitiously also set
aside land for future developments, capable of serving up to 60 million
passengers per year, roughly the number handled annually by Jakarta’s
Soekarno-Hatta International Airport.
Situated
next to the airport is the company’s 177-hectare aerospace industrial park. In
December GMF-AeroAsia — a subsidiary of national flag carrier Garuda Indonesia
— and BAI signed a joint-venture agreement to establish a company specializing
in aircraft maintenance.
This joint
venture is a follow-up to a memorandum of understanding signed by both parties
in early 2014, which plans to turn Bintan into a new regional hub and
maintenance facility center for Garuda Indonesia in order to better tap the
Southeast Asian market.
According
to Richard Budihadianto, chief executive of GMF AeroAsia, the first phase will
see two single-bay hangars, each capable of handling heavy maintenance on
wide-body aircraft, plus a third specialized wide-body painting hangar.
He
explained that Bintan is the perfect location for the operation as it is near
Singapore, where several regional offices of major aviation industry players
are located.
The airport
is also integrated with a seaport so the movement of aircraft components will
be easy and efficient. Aside from already owning several Boeing 747s, Garuda
Indonesia will soon receive 10 Boeing 777 jets, while its fleet of Airbus A330s
is projected to grow to 30. The total Asia-Pacific market for aircraft
maintenance reached $16.4 billion in 2013, and is expected to grow to $26.5
billion by 2022.
The joint
venture will handle manufacturing and assembly of aircraft engines and
components, aviation training and research and development centers.
There will
be a dedicated township, including residential areas for employees,
dormitories, a health center, sports center and convenience stores to cater to
management and staff at the aerospace industrial park.
“There must
be a bundling of several activities in the area to trigger the required base
traffic at the airport in order to justify the investment,” BAI managing
director Michael Wudy said.
“The Bintan
airport comes from the necessity to open access for tourists to Bintan and to
provide landing and take-off facilities for aircraft using the heavy maintenance
facility.”
The story
was first published on GlobeAsia’s February edition
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