Foreign investors eye Indonesia airports

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Indonesia studies building new airport for JakartaIndonesia’s need for more and better airports is drawing strong interest from foreign transport and construction companies, hungry for a slice of the action in one of world’s the fastest growing markets for air travel, Voice of America reported.

In December 2013, Indonesia is expected to ease regulations to allow foreign companies, like India’s GVK Power & Infrastructure and South Korea’s Incheon International Airport Corp , to manage and operate airports in what is already the world’s fifth largest domestic air travel market.

Indonesia’s airports, many of which are operating at two to three times above their designed capacity, are crying out for investment after years of scant government funding, inefficient bureaucracy, and unending disputes over land rights. Its nearly 200 public airports are barely coping with a travel boom and could lose market share to Singapore, Malaysia and other regional hubs if it doesn’t quickly expand, industry officials warned.

The country’s main airport, Soekarno-Hatta International Airport in Jakarta, is expected to handle 64.4 million passengers this year, nearly triple its designed capacity of 22 million. The country’s newest international airport, located in northern Sumatra’s provincial capital of Medan, is already operating at capacity after opening just four months ago.

Budget carrier Lion Air, which has ordered more than 500 planes for delivery in the next decade, warned its new aircraft could be diverted to its affiliates in Thailand or Malaysia if Indonesia can’t accommodate its plans to expand into the international market, said Edward Sirait, the firm’s director of general affairs.

Indonesia’s flag carrier Garuda Airlines, which last week announced plans to double its fleet to 350-400 aircraft by 2025, is also being forced to move many of its new planes to Batam and Medan airports due to the lack of capacity in Jakarta.

France’s Vinci, Germany’s Fraport AG, South Korea’s Incheon, Japan’s Mitsubishi Corp and Sojitz Corp have recently approached Indonesian companies about possible investment opportunities, said two senior officials with state-owned air operator Angkasa Pura I. But no foreign firm has been able to grab a major stake in any of Indonesia’s major airports due to restrictive government regulations and land acquisition issues. The country’s airports are currently operated by either the government or state-owned companies.

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Reading Time: 2 minutes

Indonesia’s need for more and better airports is drawing strong interest from foreign transport and construction companies, hungry for a slice of the action in one of world’s the fastest growing markets for air travel, Voice of America reported.

Reading Time: 2 minutes

Indonesia studies building new airport for JakartaIndonesia’s need for more and better airports is drawing strong interest from foreign transport and construction companies, hungry for a slice of the action in one of world’s the fastest growing markets for air travel, Voice of America reported.

In December 2013, Indonesia is expected to ease regulations to allow foreign companies, like India’s GVK Power & Infrastructure and South Korea’s Incheon International Airport Corp , to manage and operate airports in what is already the world’s fifth largest domestic air travel market.

Indonesia’s airports, many of which are operating at two to three times above their designed capacity, are crying out for investment after years of scant government funding, inefficient bureaucracy, and unending disputes over land rights. Its nearly 200 public airports are barely coping with a travel boom and could lose market share to Singapore, Malaysia and other regional hubs if it doesn’t quickly expand, industry officials warned.

The country’s main airport, Soekarno-Hatta International Airport in Jakarta, is expected to handle 64.4 million passengers this year, nearly triple its designed capacity of 22 million. The country’s newest international airport, located in northern Sumatra’s provincial capital of Medan, is already operating at capacity after opening just four months ago.

Budget carrier Lion Air, which has ordered more than 500 planes for delivery in the next decade, warned its new aircraft could be diverted to its affiliates in Thailand or Malaysia if Indonesia can’t accommodate its plans to expand into the international market, said Edward Sirait, the firm’s director of general affairs.

Indonesia’s flag carrier Garuda Airlines, which last week announced plans to double its fleet to 350-400 aircraft by 2025, is also being forced to move many of its new planes to Batam and Medan airports due to the lack of capacity in Jakarta.

France’s Vinci, Germany’s Fraport AG, South Korea’s Incheon, Japan’s Mitsubishi Corp and Sojitz Corp have recently approached Indonesian companies about possible investment opportunities, said two senior officials with state-owned air operator Angkasa Pura I. But no foreign firm has been able to grab a major stake in any of Indonesia’s major airports due to restrictive government regulations and land acquisition issues. The country’s airports are currently operated by either the government or state-owned companies.

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