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tate-run airport management firm Angkasa Pura I (AP I) plans to increase its non-aeronautical revenue to compensate for the loss in income following the termination of the company'€™s navigation business in several of the country'€™s airports.

AP I corporate secretary Farid Indra Nugraha said the company would establish regulated agents to provide cargo inspections at major airports as well as building hotels and resorts across the country.

With such programs, the company expected to increase its non-aeronautical revenue by 60 percent to Rp 1 trillion (US$103 million) this year, he added.

'€œWe need to increase our non-aeronautical revenue because we have lost our navigation business. We recently installed our new regulated agent at Juanda International Airport in Surabaya to help increase our revenue,'€ Farid told The Jakarta Post on Friday, saying that the regulated agent began working last week. The firm lost its navigation business and its navigation assets, including the Makassar Air Traffic Service Center (MATSC) in South Sulawesi worth Rp 2 trillion, after the central government established the Indonesian Flight Navigation Service (PPNPI) or AirNav Indonesia in January to take over navigation activities.

Farid was optimistic that the firm would be able to compete in the cargo inspection business, saying it would provide better service but for lower prices. '€œOur equipment is new and the price [at Juanda International Airport] will be only Rp 300 per kilogram, while other players charge more than Rp 1,000 per kg. We believe we can gain a great deal from this sector because demand for security-checked cargo is increasing,'€ he said.

Since the government introduced a new system for cargo inspections at the end of 2011, which includes scanning single packages with X-ray machines operated by regulated agents instead of warehouse staff, the demand for air freight security has risen.

According to recent Transportation Ministry data, 13 cargo inspection firms operate at the main gateway, Soekarno-Hatta International Airport in Cengkareng, Banten and Juanda International Airport. More than five companies are currently applying for permits to operate as regulated agents.

After Surabaya, AP I planned to establish regulated agents at Adi Sumarmo Airport in Central Java; Syamsuddin Noor Airport in South Kalimantan; Sepinggan Airport in East Kalimantan; Sam Ratulangi Airport in North Sulawesi, and Pattimura Airport in Maluku this year, he said.

He added that the firm was about to launch a strategic partnership with domestic and international logistics players to help boost its logistics sector. However, he refused to disclose the names of the companies who will be working with them.

Once the partnership is in place, the firm also plans to build warehouses in key locations and develop a transportation system to support its logistics endeavors in the near future.

Moreover, he said the firm was set to open its first hotel, the Ibis Budget Surabaya Airport Hotel, which is located at the Juanda International Airport, on April 30th. AP I is working with France-based international chain Accor to run the hotel in a bid to deliver good service and capture a slice of the international market.

Two more hotels, the Ibis Budget Makassar Airport and Novotel Bali, are expected to commence operations at the end of 2013.

'€œAs a company, we have to continue to grow to deliver the best service to our customers. In the future, we hope to be known for our logistics, property, food and beverages, and other service industries,'€ he went on.