GMR Airports and state-owned PT Angkasa Pura II (AP II) will create a joint-venture company called PT Angkasa Pura Aviasi to run the airport. The Indonesian company will own 51 percent and the Indian company 49 percent of the joint venture, according to a statement.

The deal is worth US$6 billion, including at least Rp 15 trillion ($1.05 billion) in investment from strategic partners.

“We are committed to transforming Kualanamu airport into an international hub for western Indonesia,” said GMR Indonesia president director K.V. Satyanarayana.

Read also: Asian, European investors express interest in Kualanamu development project

The airport handled more than 10 million passengers in 2018, and AP II expects the partnership to expand the airport’s annual capacity to 17 million passengers in stage one, 30 million in stage two and 42 million in stage three of a development plan. The operator did not specify a timeline.

AP II president director Muhammad Awaluddin said all assets related to the airport would be handed over to AP II after the 25-year partnership expired.

The state-owned airport operator opened the expansion of the airport to public-private partnerships in 2019, aiming to serve more international travelers and to compete with Singapore’s Changi airport and Malaysia’s Kuala Lumpur International Airport.

Kualanamu airport is closer to mainland Southeast Asia than Jakarta’s Soekarno-Hatta International Airport, the busiest airport in the country.

However, international flights to Kualanamu account for only 11 percent of its total traffic. AP II aims to raise the percentage to between 40 and 45 percent. 

“Kualanamu International Airport has a very strategic location. It is very possible to make it a Southeast Asian hub. With this partnership, Kualanamu International Airport can be an economic mover in western Indonesia, especially in North Sumatra,” said Awaluddin.

GMR, which claims to be the largest private airport operator in Asia, manages airports in New Delhi; Cebu, the Philippines; and the Greek island of Crete, among others.

Kualanamu airport resumed domestic flights in November 2020 after the government eased travel restrictions amid the COVID-19 pandemic. International flight volumes to the airport plummeted over 70 percent last year as a result of the restrictions.

Read also: Kualanamu sees drop in international flight

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