Aircraft and Parts in Indonesia

A Hot Tip about Engines and Turbines for Aircraft and Spacecraft in Indonesia

Posted on: 2 Mar 2010

Overview

The Indonesian aviation industry offers excellent prospects for U.S. products since the current aircraft fleet consists largely of American aircraft. More than 95 percent of aircraft and parts are imported. Leasing services, aircraft spare-parts and maintenance services look to U.S. products as their source. With its population of over 237 million spread over 13,000 islands, Indonesia is an attractive market for the airline industry. The increase in the number of airline passengers in the last two years has been impressive. The number of domestic passengers reached 34.01 million in 2006, 39 million in 2007 and leveled to 37 million. In 2009, the Indonesia National Air Carriers Association (INACA) predicted that the industry would grow at10%. In addition, there will be increased demand for cargo and chartered private aircraft during the campaign period for the 2009 election.

 

Currently, there are 17 scheduled and 28 chartered airline companies operating in Indonesia. In 2008, there were 739 units of aircraft, serving 167 domestic and international routes. On January 12, 2009, the GOI enacted the new Aviation Law No 1, 2009 that restricts licenses airline companies operating at least 10 aircraft. The law also adopts the ICAO safety standards requirements. The government will impose sanctions upon the airlines and their personnel if the safety requirements are not met. The new law implements the provisions of the Cape Town convention on International interests in mobile aircraft equipment, which assures lenders protection of their interests. In response to the improved financial securities, lenders such as US Export Import Bank and others are vigorously engaged in financing aircraft to sell and lease to Indonesian companies. Under the new law, a new government agency will be set up for managing the air traffic control and navigation systems. Private companies will be allowed to manage airports and compete with the current operators, PT Angkasa Pura I and II.

 

The size of Indonesia’s total market of aircraft and spare-parts increased dramatically to $978.6 million in 2006, from $491.7 million in 2005, due to several aircraft and helicopters orders from the Indonesian Police, military and commercial airlines. Imports of aircraft and parts for 2007 amounted to $1,030.5 million, with imports from the United States reaching $641.9 million. It is expected that the import value will remain high since several airline companies are expecting to receive deliveries from Boeing such as Lion Air’s 30 units of B 737-900 ER, and Garuda’s 25 units of B 737-800 NG and seven B 777-300ER. In addition, Lion also ordered 25 units of ATR, Mandala and Batavia ordered 30 and 2 units of Airbus A-320 respectively.

 

Best Products/Services

Imports from U.S. suppliers are particularly desired in the following areas: airplanes and other aircraft, parts, aircraft launch gear and parts, engines, engines parts, instruments and appliances for aeronautical use, and aircraft electrical wiring sets. U.S. companies also have a strong presence in providing training, engine repairs and maintenance services.

 

Opportunities

In order to expand routes, additional aircraft will be needed by new and existing airlines. Although not all of these firms intend to buy new aircraft, there are excellent opportunities for U.S. aircraft leasing companies to lease their aircraft to Indonesian airlines. In addition, with more aircraft in operation in Indonesia, there will be a greater need for more aircraft spare-parts and maintenance services in the near future. Similarly, leasing and sale of helicopters for mining and petroleum industries provide another opening for American products and services.

 

With the new USG policy for allowing of export defense equipment to Indonesia, there are also opportunities for U.S. defense manufacturers to export fighter aircraft parts and other defense related equipment to the Indonesian military.

 

 

 

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Posted: 02 March 2010