Executive Column: Susi Air, a business started by accident
The Jakarta Post
The Jakarta Post
PT ASI Pudjiastuti Aviation (Susi Air) has gradually developed into an important domestic carrier in Indonesia. In the beginning, the air carrier ' with its two light aircraft ' was operated only to support the fishery business of its owner. But now, with a fleet of nearly 50 aircraft, the carrier has become an important charter airline operator that provides services in many parts of the country.
The Jakarta Post's Nurfika Osman recently spoke to Susi Air owner and CEO Susi Pudjiastuti to seek insights on how she started the business and her plan for the airline's future. Susi also discussed the battles she faced to develop commuter air services in the country.
What brought you to enter aviation industry, particularly in the charter and commuter services area?
I began this business by accident. I never planned to run an aviation company. What could a woman who had only been educated up to the second year of high school do? Aviation was not something I thought about. I always knew I had to be an independent person and focus on how to continue my life with education I had. I finally turned to the aviation industry because my fishing business in Pangandaran [West Java] needed fast and reliable transportation. I needed it because I struggled to keep my fish and lobsters alive and fresh for customers in Singapore and Hong Kong.
I realized I couldn't rely on land transportation anymore because it took 12 hours to bring fish products to Jakarta. If severe traffic jams occured in Nagrek [a district in West Java], for example, the journey would take 18 to 20 hours. It could take more hours before the goods reached the buyers. The fish and lobsters could die on the way, which would be disastrous for the business.
Then I needed aircraft to transport my fisheries products directly to my customers because our poor infrastructure couldn't support my business. In 2000, the idea came to me that I could buy two units of Cessna Caravan, which I did in 2004.
Shortly after our planes arrived, the tsunami hit Aceh, just a day after Christmas in late 2004. I received a text message from Teten Masduki [former executive of Indonesia Corruption Watch], he said that Aceh was like a killing field, dead bodies everywhere.
Then I remembered a Simeleu [an area in Aceh] regent that once visited Pangandaran to study how to run an integrated fisheries business. At that point, I decided I had to enter Aceh even though the insurance did not cover the province.
Finally, we got the insurance for our planes on Dec. 27 because I kept calling people to insure us, including Dipo Alam [now the secretary of the Cabinet]. Susi Air became the first plane to land in Aceh, in Simeleu and Meulaboh, just a few days after the tsunami. We brought media, logistics, NGOs and money to the area for two weeks for free.
When we decided to leave Aceh, foreign NGOs chartered our planes for a year. Since then, we've continued to expand our business in the aviation industry. We picked the charter and commuter services area because we witnessed how vital this transport was for remote and isolated regions.
After you started with two aircraft for your fisheries business, how did you then expand your business?
After Aceh, we bought one new aircraft in 2006 because we had enough money for this expansion after we chartered our aircraft for foreign NGOs throughout 2005. We entered the Papuan market in that year, followed by Kalimantan in 2007. In Papua, our main base is in Sentani while in Kalimantan we have a main base in Balikpapan [East Kalimantan]. Now, we fly to many points across the country from Aceh to Papua. We transport anyone and anything, from the distribution of raskin [rice for the poor] to senior government officials.
Today, we have 49 planes, including the Cessna C208B Commuter, Cessna C208B Executive, Piaggio P180 Avanti, Pilatus PC-6 Turbo Porter, Diamond DA 42 Twin Star, Agusta Grand A1095 and Agusta Koala A119KE. We fly between 150 to 200 times a day nationwide and abroad. About 60 percent of our business serves commercial regular routes and pioneer routes while the rest is charter flights.
By the end of this year, Susi Air will be able to connect administrative cities to Jakarta and its respective regions alongside the west coast of Sumatra. Next year, we plan to connect the east coast [of Sumatra].
We want to add 13 more aircraft in the coming years in a bid to strengthen our networks and bridge small cities to the provincial capitals and regency.
What are challenges you face in this business?
First is of course the funding, because the airline business is capital intensive. Second is human resources because we need pilots, crew, ground crew, engineers and air traffic controllers to support our expansion. More than 90 percent of our pilots are foreigners because we cannot get local pilots. Indonesian pilots mostly fly with commercial jets operated by the country's major airlines. Indonesia can only produce 200 to 300 pilots annually yet we need 2,000 pilots a year. How could I get local pilots?
Third, I want the government to make this industry easy for us. I spend around Rp 6 billion [US$618,000] annually for the administration and paperwork of my pilots. It means that I've spent Rp 30 billion only on administration while with that amount of money I could have established a flying school, teaching Indonesians to become pilots. Landing fees are also too expensive. I think it's unfair to charge us the same as aircraft that bring 70 passengers and fly to bigger cities.
Do you have plans for regular flight services in the future to take the advantage of the country's growing aviation industry?
No. I won't compete with Garuda Indonesia or Lion or any other airline. I will continue my business in this area because with the small planes that we operate, we help a lot of people who live in small cities to continue their lives, such as victims of disasters and the sick. Seeing them happy and healthy after we are able to evacuate them is something that we cannot buy with money.
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