T

he contribution of non-aeronautical revenue to airport operators'€™ revenues has started to increase, as income generation from non-airline businesses such as retail and hotel industries improves.

State-owned airport operator Angkasa Pura I, which manages airports in eastern parts of the country, saw its operational profit grow by 70 percent to Rp 1.1 billion (US$84,291) in 2014 from Rp 693 million in 2013.

AP I president director Tommy Soetomo said the significant increase in profit was due to the jump in non-aeronautical revenue that reached 1.9 trillion last year, up 79 percent from 1.1 trillion recorded in 2013, following the completion of the firm'€™s expansion projects at its three major airports: Juanda International Airport in Surabaya, East Java; Sultan Aji Muhammad Sulaiman Sepinggan International Airport in Balikpapan, East Kalimantan; and Ngurah Rai International Airport, Bali.

'€œWe did several adjustments and began to prioritize our non-aeronautical revenue. Gradually we will no longer rely on our aeronautical revenue such as airport charges,'€ Tommy said in a press statement.

He said that the firm had booked Rp 641 billion in operating income from its non-aeronautical businesses, following the operation of the company'€™s subsidiaries, namely Angkasa Pura Hotel, which currently manages Ibis Budget Surabaya Airport; Angkasa Pura Property; Angkasa Pura Logistics Support; and Angkasa Pura Retail.

'€œThe proportion of our non-aeronautical revenue reached 43 percent of the total revenue in 2014, which is much improved compared to 2010,'€ he said.

Meanwhile, state-owned airport operator Angkasa Pura II (AP II), which manages airports in western parts of the country, including the country'€™s main gateway, Soekarno-Hatta International Airport, also saw increasing profit last year, backed by improving non-aeronautical revenue.

AP II booked a Rp 1.098 trillion profit last year, a slight increase from the Rp 1.032 trillion it booked the previous year.

AP II president director Budi Karya Sumadi said the net income increased in line with the 16 percent increase in revenue from Rp 4.183 trillion in 2013 to Rp 4.871 trillion in 2014.

Budi said the company had started to diversify its income following the establishment of Airnav Indonesia in 2012, which had taken over airport operators'€™ air navigation service management.

Following the establishment of Airnav, AP II saw a Rp 600 billion decrease in revenue in 2012 as it could no longer charge for air navigation services.

AP II finance director Andra Y. Agussalam said the company'€™s largest revenue contributor last year was still the aeronautical sector '€” comprising landing fees and passenger service charges with 63 percent; followed by non-aeronautical, including aircraft parking fees and retail, with 34 percent; and cargo with 3 percent.

'€œThe biggest revenue contributor was still the aeronautical sector, however our non-aero revenue increased 27 percent to Rp 1.66 trillion last year, and we aim to increase it at least to a 40 percent contribution from 34 percent last year,'€ Andra told The Jakarta Post on Wednesday.

Andra said the firm was on the way to set up subsidiaries that would be in charge of the firm'€™s retail and cargo businesses this year.

'€œWe have finished the study and will soon propose it to the State-Owned Enterprises Ministry,'€ he said.