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Better inter-regional connectivity through improved air infrastructure

Interview - April 11, 2014
Creating inter regional connectivity between the huge Indonesian archipelago is a key priority for the country’s Ministry of Transport. In an interview with United World, the Former Director General of Civil Aviation Herry Bakti talks about how the DCGA is making continual improvements to its many airports, and having opened 12 new ones in Indonesia last year alone, how the focus is now to take the pressure off Jakarta – the world’s 9th busiest airport – and distribute air traffic more evenly across the country
HERRY BAKTI, FORMER DIRECTOR GENERAL OF CIVIL AVIATION
HERRY BAKTI | FORMER DIRECTOR GENERAL OF CIVIL AVIATION
Could you outline the most significant initiatives undertaken by the Directorate General of Civil Aviation (DCGA) towards linking the Indonesian Archipelago?
 
The DGCA is continuing to make efforts towards supporting the creation of inter-regional connectivity.

For example, we continually look at the construction and development of airport infrastructure and network upgrades, domestic flights as well as the provision of subsidies for the air transport pioneers. In 2013 we began operations in 12 new airports across Indonesia. We are currently developing 42 airports in outlying areas and in the last five years we increased the number of domestic passengers by 13%.

We have 19 arlines serving 261 routes in 121 cities and we are increasing the spread of our remote air freight too. In fact, in 2013 air frieght serviced 114 citites and connected 138 pioneer routes. 
 
Jakarta’s Soekarno–Hatta International Airport is the 9th busiest airport in the world. What measures are you taking to help this airport, the city itself, and outlying airports such as Halim Perdanakusuma Airport, absorb more visitors?
 
The Jakarta airport is our biggest problem at the moment, however, in a way it is a good problem to have. Our economic and aviation growth has been consistent over the last few years with the growth the civil aviation sector amounting to around 15-20%. At the moment, Jakarta is our hub – it is the main gate to Indonesia.

We’re working now to build the other hubs and distribute traffic to our other major airports in Surabaya, Bali and Makassar. We have around 299 commercial airports across Indonesia but half of all passengers coming into Indonesia come through Jakarta.

We’re looking hard at our current airport sites and aiming to improve our infrastructure. We’re redeveloping old terminals, building new ones, improving access roads and highways to airports and aiming to overhaul taxi-rank and transit infrastructure. In fact we’re scheduled to open half of a new terminal at Soekarno-Hatta by the end of this year.

The new terminal will improve capacity by about 15 million passengers per year. Our target is for the airport to be capable of receiving 86 million passengers by 2016. We are modeling our developments on Heathrow in London, which has a capacity of around 88 million. We are also in discussions with the government and local communities about developing a third runway and fourth terminal for Soekarno-Hatta. The absolute maximum capacity this airport can reach is about 95 million. 
 
As the Indonesian civil aviation sector has been expanding over the last decade, what challenges does this growth present for your directorate? 
 
Air transportation is a key pillar of Indonesia’s domestic and international transport network and ultimately we will have to make improvements to the quality and quantity of services in all areas within civil aviation. This will be the key challenge. Taking into account everything from human resources, facilities and infrastructure to policies and regulations, we must properly manage the growth and liberalization of the sector. It is important that we are able to do this in a challenging economic climate, while facing rising fuel and insurance costs. 
 
The Ministry of Transportation, through the Directorate General of Civil Aviation, will always make a maximum effort to improve the quality of aviation in Indonesia, in line with improving the security and safety of flights. We are also making an effort to develop facilities and infrastructure to accommodate Indonesia’s growing number of passengers each year. 
 
We also face challenges posed by the Open Skies policy that encourages the liberalization of rules and regulations across the international aviation industry. This requires Indonesian airlines to be able to improve the quality of Indonesian airlines, in terms of facilities, infrastructure and policies in order to compete with the world's airlines.
 
Indonesian airlines are continuing development efforts, both in the construction and development of the airports and their supporting infrastructure.

The Directorate General of Civil Aviation will focus on the development of air navigation, improved quality and quantity of aircraft, and cooperation between the government and the private sector through Public Private Partnership (PPP). It will also do so through the signing of co-operation efforts with ASEAN multilateral forums and bilateral cooperation with International Civil Aviation Organization (ICAO) member states.

With the efforts undertaken by the Indonesian government and with the support of all stakeholders, it is expected Indonesia can be internationally competitive, especially in the face of global air transport liberalization in 2015.
 
How is your directorate addressing the issue of nation-wide pilot shortages?
 
The directorate has certified a number of flying schools in Indonesia over the past five years. As a result, today we have a total of 17 flight schools, of which 2 are managed by government and 15 are managed privately. These schools currently have the ability to supply about 300 pilots each per year. With coming growth we predict that between 2014 and 2018 Indonesia will require approximately 4,000 - 8,000 pilots per year. In other words, we expect a shortage of about 2,500 pilots during the 2014 – 2018 period.
 
To combat this, the directorate has opened the door wider for validation provisions of foreign pilots who wish to fly in Indonesia. Currently, a co-pilot must fly at least 250 hours in Indonesia before being able to pilot a commercial aircraft.

Previously, only a captain with a qualified instructor was able to fly with an Indonesian airline. We have also been holding a number of pilot license conversion for military aviators who have completed active service and can be succonded to fly civilian aircraft. We are also in the process of securing mutual recognition of foreign flight school graduates so that after graduation they can be directly used by our airline operators. 
 
What possible effects will the creation of the ASEAN Economic Community (AEC) have on the Indonesian aviation sector?
 
The ASEAN Economic Community is expected to deepen and broaden economic integration and connectivity within ASEAN.

This is intended to produce a single market and production base, equitable economic development, and regional unity in a competitive and fully integrated global economy. Of course this needs to be done by converting the diversity among the member countries of ASEAN into a business opportunity and making ASEAN a more dynamic and powerful actor in the global supply chain. On this basis, ASEAN drafted the ASEAN Framework Agreement for the Integration of Priority Sectors.

The framework includes air transportation as one of the 11 priority sectors. Indonesia is currently enhancing the quality of aiport infrastructure in order to prepare the flight conditions of Indonesia for the coming ASEAN Open Skies policy. In addition, Indonesia has always been able to provide guidance and coordination with domestic airlines in preparation for the ASEAN Open Skies.
 
To support the implementation of ASEAN Open Skies, and to support the ASEAN Economic Community more broadly, we have ratified the ASEAN Open Skies Agreement in stages, by engaging stakeholders in the ratification process. It is important that liberalization is implemented when stakeholders are ready for it. We will maintain the cabotage principle (domestic routes only for national airlines).

We will open the 5 main airports to the Asian Economic Community (AEC): Soekarno-Hatta International Airport (Jakarta), Ngurah Rai International Airport (Denpasar), Juanda International Airport (Surabaya), Hassanuddin International Airport (Makassar) and Kualanamu International Airport (Medan).

We have also set a road map for the government that is used as a guide in the implementation of Open Skies. Furthermore, we encourage airlines and management of airports to prepare a roadmap for the implementation of ASEAN Open Skies. We want to open a dialogue and provide a clear understanding of the content of the ASEAN air transport agreement to stakeholders and competent authorities and encourage Indonesia airlines to increase their capacity and capabilities to help develop the market.
 
The ASEAN Open Skies policy will provide significant benefits and have a positive impact on Indonesia. It will open up the opportunity for national airlines to expand their markets and services, in cooperation with the airlines of ASEAN member countries, in particular to expand their network.

It will provide the widest opportunity for a national airline to establish an airline company in another country, such as Lion Air currently setting up Malindo Air in Malaysia and Lion Thai in Thailand. The policy will increase the accessibility of air transport in Indonesian airports to aiports among ASEAN member countries, which can boost the economy.
 
To increase competition Garuda Indonesia is joining the SkyTeam alliance to continue developing an international flight network that improves services to passengers. Overall, fair competition will bring in highly competitive airlines and set aside the airlines which are inefficient. 
 
Could you elaborate on any private-public partnership (PPP) opportunities for international investors in aviation related infrastructure projects in Indonesia?
 
Indonesia is one of the world’s fastest growing economies. A key factor of this growth is increased national connectivity and sustainable infrastructure development across the thirty-four provinces. As Indonesia relies heavily on public-private partnerships to advance their agenda, many opportunities exist to strengthen relationships and forge new partnerships.
 
The Directorate General of Civil Aviation have a number of PPP projects in the planning phase at present. Such as a new grand design for Soekarno Hatta airport, multiple airports in Karawang, the relocation of Husein Sastranegara airport in Bandung, development of the North Bali airport and development of the Jakarta Automated Air Traffic Control System (JAATS) and Makassar Automated Air Traffic Control System (MAATS). 
 
So far 10 airports have already been offered to private investors, both domestic and international. Those 10 airports on offer a capacity of around 500,000 to 1,000,000 annual passenger movement and expect more than 5% annual passenger’s growth. We will have no problem with land acquisition for these airports. Currently there is a process of market consultation between Government of Indonesia and private investors regarding these projects. 

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