ASEAN SINGLE AVIATION MARKET AND INDONESIA - WILL IT SURVIVE AGAINST THE GIANTS?
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To say that Indonesia is an enigma in air transport is an understatement. On the one hand, the demand for air transport in Indonesia is higher in proportion to its GDP per capita. Its economy can be expected to grow 6% to 10% annually. A single aviation market could add another 6% to 10% growth in sheer demand. It is one of the wealthiest countries in the world, being the 16th richest country currently, and, according to an Airbus forecast, will be the 7th richest in 2030. Yet its airports are badly in need of expansion, its infrastructure is bursting at its seems, and above all, its airlines are strongly resisting liberalization of air transport in the region for fear of being wiped out by stronger contenders in the region. Against this backdrop, it is incontrovertible that Indonesia's civil aviation is intrinsically linked to regional and global considerations. Indonesia's archipelagic topography makes its people heavily reliant on safe, regular and reliable air services that may connect them not only internally but also to the outside world.
A single aviation market in the ASEAN region will bring both benefits to Indonesia and challengers to its air transport sector. This article discusses the economic and regulatory challenges that Indonesia faces with the coming into effect of the ASEAN Single Aviation market in 2015.