Before the COVID-19, Indonesia's aviation industry was already under pressure last year as passengers' growth slowed due to increased tickets price. The pandemic brought the industry to survival mode as people's confidence to fly and travel plummets. Although there has been a slight improvement in the past couple of months in terms of number of passengers, a full return to normal is something that wouldn't happen soon. Forbes Indonesia sits with the newly elected chairman of Indonesia National Air Carriers Association (INACA) Denon Prawiraatmadja, to hear his perspective on the industry's outlook as well as how the new omnibus law affects airline business. Here is the edited excerpt of the interview:
Forbes Indonesia (FI): Can you describe the impact of the large-scale social restriction (PSBB) on the airline industry? Has there been any improvement?
Denon Prawiraatmadja (DP): In May, flight activity was only 5%, and I assume that was because of the movement of logistics. However, the recovery process in the aviation industry is not simple. This is because even before COVID-19, the airline industry was already a highly regulated industry, with labor and capital intensive. From May to June this year, our activities decreased by almost 95%, a very significant drop. If we compare with last year, 91 million passengers were flying throughout Indonesia, but suddenly there were only hundreds of thousands left during the PSBB period. The airline industry is an ecosystem. If the planes are parked on the tarmac, the airports have to shut down, and fuel consumption decreases. The drop in airline activities has dragged down its supporting industries. Last year, there were 8 million to 10 million domestic passengers per month, with around 91 million annually. Now, the figure is only 2 million to 2.5 million passengers per month. The trend is slightly improving but not yet fully recovered since the infection rate is still rising. Globally, domestic routes within individual countries will open up first, followed by short-haul international services. Intercontinental travel would probably follow after that, although that is a point we haven't resolved yet.
FI: Airlines switched their business to cargo and charter flight business. Would this strategy help them survive?
Continue reading your story on the app
Continue reading your story in the magazine
Pandu Sjahrir Bets on Unicorn IPOs on the Indonesia Stock Exchange
Japan: the Land of the Rising Stocks
The Japanese equity market is the 3rd largest in the world and responds to global economic conditions more sensitively than other developed markets. Many international investors still associate investing in Japanese equities with “Japan lost decade “ and the narrative of Japan as a country with no growth and a stock market that chronically underperformed the US and even European equities. The coronavirus pandemic has done what seven years of Abenomics could not: push Japan’s Nikkei 225 benchmark above the 25,000 marks for the first time since 1991.
Indonesia to Establish Electric Battery Corporation
Indonesia is gearing up for establishing an electric battery company to meet the country's prospective development of electric vehicles including motorcycles, cars and buses. The State Owned Enterprises Ministry has been preparing a holding company, Indonesia Battery Corporation (IBC) that will build a battery industry for electric vehicles, which was expected to be completed in the first half of 2021.
Room for Recovery
RedDoorz books growth amid pandemic
The World Climate Change Conference, COP26, will be taking place in November 2021 in Glasgow, Scotland. Following a period of US indifference to such global discussions as espoused by its predecessor, the new administration's decision to immediately re-join the Paris Accord will help to bring a stronger emphasis and commitment from major global economies to the concrete actions which are needed to address the impacts of climate change on the world's ecosystem. A strong delegation is expected from Indonesia to set out what has been done towards its commitments to cut back carbon emissions as well as to help shape the discussions for future actions.
Researcher - Adi Utarini
Professor Adi Utarini is an Indonesian public health researcher fighting dengue in Indonesia. She worked with the World Mosquito Program (WMP), a joint initiative between Monash University and Gadjah Mada University research team, and has successfully utilized Wolbachia bacteria to fight dengue fever disease - one of the country's major health problems. There were nearly 96,000 infection cases in 2020 in Indonesia with 661 fatalities.
Credit Card Killer
Millennials were shunning plastic and supposedly wary of consumer debt. AFFIRM ’s MAX LEVCHIN saw a way to repackage buying now and paying later for younger folks—and it’s made him a billionaire.
Sjamsul Nursalim Clears Wanted List
The Corruption Eradication Commission (KPK) decided to stop its investigation on graft cases surrounding Bank Indonesia Liquidity Support (BLBI) that named Sjamsul Nursalim and his wife Itjih Nursalim as suspects since 10 June 2019.
EV in Indonesia–Execution is the Key
Indonesia is rapidly becoming the citadel of Electric Vehicles (EV) in the Region. The media has been abuzz with news of leading car manufacturers like Hyundai and Toyota exploring to set up their EV factories in Java and, of course, the on-again-off-again news of Tesla setting up their EV battery facility locally.
Agrarian Reform in Cities: Options by the Government
Agrarian reform is a goal of the government since the promulgation of the agrarian law of 1960. The agrarian reform concept has also expanded, it's now beyond the redistribution of farms to the farmers but also land to the non-farmers. In cities like Jakarta, farmers are certainly not an essential subject. Instead, illegal houses and illegal occupancies that create slum areas are more problematic. Those are people who live in a building on a land plot that he does not own or cannot prove legal ownership. Never-ending legal disputes involving many parties claiming land ownership are a huge problem to be resolved.
Readers Choice: Best Destinations For Photography
Species diversity, ideal in-water conditions and weird wonders earn these destinations top honors
Where Vaccine Hopes Run High
Indonesia is the site of one of the leading trials. It’s eager to take the risks
VOTING DAY around the World
When it comes to elections in the United States, it’s pretty certain that most people will be voting on a Tuesday. The custom of voting on a Tuesday in November was established when many Americans were farmers. By November, the growing and harvesting seasons were over making it easier for farmers to leave their work and go vote.
One Child Fund
Indonesia Children’s Home
TRAVEL TIPS: INDONESIA
Get the most out of your next dive trip
Two sailors with a thirst for voyaging
Into the Wild
Connect with Borneo’s orangutans and the people dedicated to conserving them and their habitat.
In Defense Of Traffic Jams
Gridlock is the bane of all commuters. But when congestion reaches pure, unadulterated chaos, the effect can be sublime.
Panasonic Leaves Semiconductor Business With Taiwan Sale
Japanese electronics manufacturer Panasonic Corp. is abandoning the semiconductor business with the sale of its last business in that sector to a Taiwanese company.
Paying With Plastic
A woman collects plastic on Sanur Beach to supplement her income