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Accelerating air transportation recovery: Challenges and opportunities
One of the primary barriers to accelerating the recovery of domestic air transportation is the limited number of aircraft available for domestic routes.
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A Qatar Airways Boeing 787 Dreamliner receives a water cannon salute after making its inaugural arrival at Kualanamu International Airport in Deli Serdang regency, North Sumatra, on Jan. 15, 2024. The airline opened its third route in Indonesia, with the Doha-Medan route flying three times a week on Mondays, Thursdays and Saturdays. (Courtesy of Qatar Airways/-)
T
he global air transportation industry is undergoing a significant recovery following the disruption caused by the COVID-19 pandemic. As restrictions ease and people return to traveling, passenger demand continues to rise. However, there is a notable discrepancy between the recovery of domestic and international Indonesian air travel. International air travel has not only recovered but also exceeded pre-pandemic levels. The ratio of international passenger numbers in the first eight months of this year to that of the first eight months of 2019 is 100.6 percent. In contrast, domestic air travel has remained below pre-pandemic levels, with a ratio of 83.9 percent in the same periods. This raises critical questions: Why is domestic air transportation recovery slower? Is there a shortage of aircraft serving domestic routes, and if so, how can this be addressed?
One of the primary barriers to accelerating the recovery of domestic air transportation is the limited number of aircraft available for domestic routes. Data from Angkasa Pura (InJourney Airport) shows that only about 420 aircraft are currently operating on domestic routes. This is significantly lower than the 740 aircraft that were in operation in 2019. This shortfall has a direct impact on flight capacity and contributes to the increase in ticket prices, as high demand exceeds the available supply of flights.
The limited availability of aircraft serving domestic routes is a major factor slowing the recovery. With fewer planes, airlines struggle to meet growing passenger demand, and as a result, ticket prices have surged. This combination of reduced capacity and high fares further discourages potential travelers, exacerbating the slow pace of domestic air transport recovery. In comparison, international air travel has rebounded faster as a result of more readily available aircraft and higher global demand for cross-border travel.
Despite these challenges, several strategic measures can be taken to accelerate domestic air transportation recovery. The first is creating broader opportunities for new airlines, both domestic and international, to enter the Indonesian market. The entry of new airlines would increase the number of available aircraft, expand flight routes and enhance overall passenger capacity.
A recent example of a new entrant is BBN Airlines Indonesia, which has brought renewed optimism to the domestic aviation industry. Established in August 2022, BBN Airlines Indonesia is part of the Avia Solutions Group, an aircraft, crew, maintenance, and insurance (ACMI) service provider based in Dublin, Ireland. The airline serves key domestic routes, including Jakarta-Surabaya, Jakarta-Balikpapan and Jakarta-Denpasar, operating seven flights per week on each route.
Currently, BBN Airlines Indonesia operates three Boeing 737-800 aircraft for passenger charter flights, three cargo planes and several Boeing 737-400 planes that serve both domestic and international routes. The airline has ambitious expansion plans, intending to increase its fleet to 10 commercial aircraft by the end of 2024 and to operate 40 aircraft by 2027. The presence of new airlines like BBN Airlines not only boosts flight capacity but also creates healthier competition in the industry, reducing the dominance of a few major airlines and giving consumers more choice and better prices.
The second key strategic step involves controlling the rise in domestic ticket prices, which have shown an upward trend in recent months. While demand for domestic flights is increasing, the limited number of aircraft in operation has led to less competition among airlines, causing prices to rise. This situation risks further hindering the recovery of domestic air transport, as passengers may opt for other modes of travel due to cost concerns.
