Demand for S'pore-Jakarta flights soars

Demand for S'pore-Jakarta flights soars

Every week for the past four years, Singaporean businessman Ng Ah Wang has been flying to Jakarta en route to Banjarmasin, South Kalimantan, where he owns a machinery construction business.

Travelling the other way is Mr Wahyudin Sugiarto, who needs to meet his Singapore-based business partners regularly.

As Indonesia's US$900 billion (S$1.2 trillion) economy expands at a steady pace, business opportunities and tourism are booming, leading to a massive expansion in air travel in the nation of 250 million. Airlines operating in Indonesia are ramping up their fleets and airports are running out of capacity.

Little surprise, then, that the Jakarta-Singapore air route is considered to be the fastest-growing major international aviation sector.

Mr Ng, 47, who usually flies on Garuda Indonesia, began noticing the jump in traffic two years ago. "More foreign businessmen are flying into Jakarta from Singapore, and most of them will use Jakarta as the point to travel to other parts of Indonesia," he said.

The route is also popular with holiday-makers.

Australian Pamela Wesley, 38, who lives in Jakarta, said she and her family took the 80-minute flight to Singapore last month to catch a connecting flight to London for their annual holiday.

They find Changi Airport convenient because it serves more than 100 airlines flying to 300 cities. Jakarta's Soekarno-Hatta International Airport has only a third of those air links.

The Singapore-Jakarta sector is so busy that Garuda is adding a 10th daily flight to Singapore, making it the route leader. Singapore Airlines (SIA), which now flies nine times a day to Jakarta, could add another flight as well.

"Indonesia is an important market for SIA and we have a good mix of both business and leisure travellers on routes to and from the country," said SIA spokesman Nicholas Ionides.

"While the majority travel point to point, a good percentage of customers on Jakarta flights transit through Changi Airport to other destinations as well, to points across our global network. This is the case for all our flights, however, and not only for Indonesia routes."

The increased capacity and frequency - at least 41 flights in each direction per day - are good news for travellers, including businessmen like Mr Wahyudin, 52.

"It is the shortest international route from Jakarta to another country and, in this case, Singapore, an aviation and financial hub. So I often get a lot of business planning done in Singapore for the region," he said.

But what is good news for passengers is not always the best news for airlines. Intense competition on the route has kept prices low, with the cheapest one-way economy ticket costing less than S$50. Competition is also putting pressure on the margins of the eight airlines flying the route.

Some small players and low-cost carriers are scaling back or have opted out altogether. Tigerair, for instance, was forced to pull out of three landing slots after its partner Mandala Air collapsed in July. Air Asia has cut two slots.

"Airlines were overly ambitious and aggressive in applying for and using newly available traffic rights in 2013.

Recent adjustments have brought much-needed rationality to the market but capacity could start being added back, again putting pressure on yields and load factors," a report by the Centre for Aviation notes, adding that the abandoned slots could be picked up by financially stable carriers.

Another issue is that while the travel distance is short, flights often queue to land at congested Soekarno-Hatta.

Mr Emirsyah Satar, Garuda's chief executive, said the Jakarta-Singapore route - the world's second- busiest international route after Hong Kong-Taipei - may fall in ranking as limited infrastructure has prevented carriers from expanding as fast as they would have liked to.

Planes often end up circling for up to half an hour before being cleared for touchdown at Soekarno-Hatta, burning up fuel, the most expensive part of flight operations.

"We have to improve everything, the facilities, the runways... everything to be modern and cope with demand," said Indonesian President Joko Widodo when he landed in Jakarta two Saturdays ago after a trip to Singapore for his youngest son's school graduation.

Airport operators say they are rushing expansion plans for several airports across Indonesia, and especially at Soekarno-Hatta, the country's busiest.

Construction work to expand its third terminal is targeted for completion by next August. That will augment capacity at the first two terminals of the world's 10th-busiest airport which handled 60 million passengers - or triple its capacity - last year.

Analysts say the expansion is long overdue and airport operators ought to be planning already for the next decade and beyond.

This article was first published on Nov 30, 2014.
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