Battle over air transportation market

Today, people are talking about an Asian era. Many believe that global economic growth will shift to the Pacific. It already is.

America and Europe are now struggling in a crisis and no one seems to know when it will end.

The Middle East continues to churn. Syria and neighboring countries keep burning. The Israeli-Palestinian conflict is relentless and has even become worse than before. In the meantime, Brazil, India and China continue to move forward and are the silver lining of Asia.

Countries are viewing with each other in order not to fall behind in the competition.

Although enjoying remarkable economic growth amid the economic crisis centered in America, Australia is looking at Asia for opportunities that might contribute to the prosperity of the country. The Australian administration has just issued its White Paper, which focuses on potential in Asia. The papers confidently says: “Whatever else this century brings, it will bring Asia’s rise.”

“The transformation of the Asian region into the economic powerhouse of the world is not only unstoppable, but is also gathering pace. In this century, the region in which we live will become home to most of the world’s middle class,” the paper goes on.

The most interesting thing the paper underlines is: “The Asian century is an Australian opportunity.” We can confidently say that the Asia-Pacific is becoming the center of gravity.

How well is Indonesia doing? Air transportation has turned into one of the most promising sectors here. The Indonesian air transportation industry is increasingly significant due to the country’s geographic location — it connects two continents and two oceans. Its geographic location is considered very strategic in the Pacific.

Moreover, passenger and air freight transportation growth have been increasingly significant in the last 5-10 years. Referring to Indonesia National Air Carriers Association (INACA) data, there is a projected 15 percent growth in air transportation passengers in Indonesia this year from the previous year’s growth of 12 percent.

The association also reported there were over 51.5 million passengers flying from or arriving at Soekarno-Hatta International Airport in 2011, which far exceeds the 23 million passenger capacity of the airport. Unfortunately, Indonesia has been classified as a Category 2 country by the Federal Aviation Administration (FAA), which is below international flight safety minimum requirements.

What should be done to make Indonesia more competitive in the ASEAN Single Aviation Market (ASAM) and/or ASEAN Open Sky 2015? Indonesian airlines ought to formulate policies on Asian Air Transport competition.

Let’s have a look at the potential. According to the Centre for Aviation (CAPA) and Innovata 2013 Yearbook matrix, Lion Air is ranked first, whereas Garuda Indonesia is fourth place in the Top 10 Asian Airlines.

Singapore Airlines, which dominated the market some time ago, went down to sixth. Many believe that unresolved customers’ complaints led to Singapore Airlines being relegated from the top three Asian airlines.

There are opportunities for Indonesian airlines, but Indonesia needs resilient and well-managed airlines in order to be able to benefit from the increasing number of people flying. According to CAPA, Garuda Indonesia scored well with very supportive corporate management along with advanced experiences and high discipline. Lion Air has successfully dominated the Asian market by purchasing hundreds of aircraft in the last three years.

Looking at this data, Indonesian air transport is expected to do well in the lucrative Asia-Pacific transportation market.

Chappy Hakim, Jakarta Post| Opinion | Tue, July 23 2013, 10:51 AM
akarta Post
The writer is a retired Air Chief Marshal and the former chairman of the National Team for the Evaluation of Transportation Safety and Security.

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