Maintaining Airworthiness
Forbes Indonesia|November 2020
Hit hard by the COVID-19, Indonesia's airline industry will have to deal with the implications for much longer.
Elisa Valenta

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?

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