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espite the fact that Indonesia is currently shadowed by the weakening value of the rupiah, the air cargo sector is projected to continue growing this year because demand for fast moving consumer goods distribution keeps increasing annually.

The Transportation Ministry'€™s recent data shows that air cargo traffic in the country'€™s 24 commercial airports reached more than 66 million packages during January'€“May this year, up from 52.5 million packages in the same period last year.   

In addition, business consultant firm Frost & Sullivan predicted that air freight volume would rise by 19.6 percent to reach 1.16 million tons by the end of this year from 970,000 tons in 2012.

Domestic airlines and logistics players are set to expand their cargo business in a bid to capture the huge market.

National flag carrier Garuda Indonesia recently signed an agreement with the Trade Ministry and the Association of Indonesian Express Delivery Services (Asperindo) to handle more air freight.

'€œThrough this agreement, we want to expand our cargo market from the far west part of Indonesia to the far east [of Indonesia] because the market is huge and promising,'€ Garuda vice president of communications, Pujobroto, told The Jakarta Post.

He said that the airline is considering the purchase of a freighter next year, either an Airbus A330-200F or the Boeing B737-700C.  

'€œWe are still conducting a feasibility study on the freighter business at the moment and we expect to make a decision sometime by the end the year or early 2014,'€ he said, adding that the airline is going to put 44 more passenger aircraft into operation '€” such as the B737-800 Next Generation (NG), B777-300 Extended Range (ER), A330-200s and Bombardier CRJ1000 NextGen '€” in the next two years.

He said that the carrier plans to make its cargo division an independent entity next year as a move to further expand its cargo business.

The firm wants to increase the contribution of the cargo divisions from the current 7 percent to 10 percent.

He also said that Garuda wanted to make Kuala Namu International Airport in North Sumatra and Sultan Hasannudin Airport in South Sulawesi their cargo hubs after Soekarno-Hatta International Airport in Cengkareng.  

The carrier is currently preparing the expansion of its cargo terminals at both airports. At Soekarno-Hatta alone, they had added a 4,625-square-meter area last year to cope with increasing cargo traffic.

The country'€™s largest player, Lion Group, through its low-cost carrier Lion Air and full-service Batik Air, has also geared up to expand its cargo business by recently setting up a new firm called Lion Express.

The groups'€™ public relations head, Leithen Francis, said that the air cargo sector was an important entity in the group'€™s business.

'€œHowever, we do not have plans to buy a freighter because we have ordered a lot of aircraft and the belly [of each aircraft] already has enough room to carry cargo,'€ Leithen told the Post.

Lion has ordered as many as 431 aircraft, consisting of 234 Airbus family planes and 201 Boeings that will be delivered in phases until 2022.

According to Lion corporate secretary Ade Simanjuntak, the first hub of Lion Express was Soekarno-Hatta and it wanted to make Hang Nadim Airport in Batam, Riau Islands, the second hub.   

In addition, logistics firm RPX Group is projected to see 25 percent growth of its air cargo division by the end of this year as it saw more demand from the customers.

RPX vice president of sales and marketing Andry Adiwinarso said that the firm has bought more cargo slots in domestic carriers like Garuda and Lion to accommodate the demand.

'€œWe are collaborating with domestic carriers to help distribute goods in the western and central part of Indonesia, we will use our own aircraft to handle the goods in the east,'€ he said.

RPX had two units of freighter '€” B737-200F '€” that are based in Papua to serve the east networks include Maluku, East Nusa Tenggara (NTT) and several parts of Sulawesi.