Tier-2 cities 'set to boost Indonesia aviation market'

Tier-2 cities 'set to boost Indonesia aviation market'
Mr Satar.

SINGAPORE - In the boom market that is Indonesia and the frontier one that is Myanmar, growth in aviation is set to come from secondary cities and gateways, respectively.

In Indonesia, air travel from second-tier cities is being propelled forward, both by higher population growth rates and a concentrated effort by the government to invest in domestic air travel - from Surabaya, to Denpasar to Yogyakarta.

With a burgeoning middle class increasingly taking to the skies, the country's aviation infrastructure is, however, feeling the strain. But Garuda Indonesia's CEO, Emirsyah Satar, called this a "happy problem" at Aviation Outlook Asia 2013 on Tuesday.

During his speech, Mr Satar referred to McKinsey data which projected Indonesia's middle-class population to grow to 135 million by 2030 from about 45 million at present. By then, the country's economy is expected to become the seventh-largest globally from the 16th now.

The government is shoring up its aviation infrastructure. By 2015, it will spend US$2.8 billion (S$3.46 billion) to build 24 new airports - 12 of which are to be operational this year, seven by next year and five by 2015.

Mr Satar said on Tuesday that Garuda's next phase of expansion will take place in these type of secondary cities - areas where population growth is already exceeding that of Jakarta's.

The airline is bolstering its fleet with 25 ATR 72-600 planes - turboprop aircraft that are particularly well-suited to the runway constraints of smaller airports.

The first two aircraft will serve five airports in Indonesia and the airline will operate five routes by year-end, Mr Satar said.

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