Indonesia aims to compete with Changi Airport & KLIA's regional dominance with new joint venture

The upgrade of Kualanamu International Airport will increase its capacity from 10 million to 54 million passengers a year.

Faris Alfiq | December 06, 2021, 06:34 PM

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Indonesia aims to compete with Singapore's Changi Airport and Kuala Lumpur International Airport with its Kualanamu International Airport, Indonesia's Deputy Minister for State-Owned Enterprises Kartika Wirjoatmodjo said on Dec. 2, Tempo reported.

The airport, which opened in July 2013, is located in northern Sumatra.

Wirjoatmodjo said that upon completion of its upgrade, the airport will capture the share of passengers transiting from southern Asia travelling to northern Asia and Australia.

He added that Kualanamu International Airport will be Indonesia's bid to fight against Changi Airport and KLIA's dominance in the region.

Investment to improve airport quality and increase capacity

According to Nikkei Asia, GMR Airports Consortium, an airport developer that's jointly owned by India's GMR Group and France's Aeroports de Paris Group, won a contract to operate Kualanamu International Airport.

The consortium will operate the airport with the local state operator Angkasa Pura II.

GMR Airports owns and runs major airports in India, including Delhi Indira Gandhi International Airport and Hyderabad International Airport.

It is also developing airports in Cebu in the Philippines and Heraklion in Greece, FMT reported.

The new company, called Angkasa Pura Aviasi, will be majority-owned by Angkasa Pura II, FMT added. 

Wirjoatmodjo added that GMR Airports had invested Rp 56 trillion (S$5.35 billion) to improve the airport's quality, as well as increase its capacity, Tempo reported.

With the investment, the airport's capacity is set to increase from 10 million passengers to 54 million passengers a year.

However, it is unknown when the upgrade would be completed as Wirjoatmodjo did not give any specific timeline for the project.

Collaboration will improve operations

Nonetheless, even with the joint venture with a foreign developer, Wirajoatmodjo clarified that Kualanamu Airport will still be owned by Angkasa Pura II.

"After 25 years, the ownership (of the airport) will wholly return to Angkasa Pura II," he said, as reported by Tempo.

He gave this reassurance following some concerns voiced by Indonesians who questioned if foreigners would own the airport.

Minister by State-Owned Enterprises Erick Thohir said that the collaboration with a foreign conglomerate will improve the airport's operations.

He added that with the collaboration, Indonesia's airports will stand a chance to be aviation hubs for passengers worldwide, Tempo reported.

Erick also said that several airports across Indonesia have the potential to be aviation hubs, like the Kualanamu International Airport and Ngurah Rai International Airport in Bali.

These airports, he said, will compete with other aviation hubs in the region, including Singapore and Malaysia.

"We will map out these airports," he said, adding that he had discussed with the country's transportation ministry the issue of reviewing its open sky policy.

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