Aircraft and Parts
Indonesia
Overview
USD Millions 2004 2005 2006 (estimated)
Total Market Size 221.0 243.0 291.0
Total Local Production 15.0 15.0 15.0
Total Exports 14.0 14.0 14.0
Total Imports 220.0 242.0 290.0
Imports from the U.S. 35.1 48.4 58.1
Note: The above statistics are unofficial estimates.
With its population of 220 million spreads over 13,000 islands, Indonesia is an attractive market for the airline industry. The increase in the number of airline passengers in the last two years has been impressive. The number of domestic passengers reached 23.7 million in 2004 and 28.9 million in 2005. Based on data until October 2006, the number of passengers was projected to reach 34 million in 2006. In 2007, the Indonesia National Air Carriers Association (INACA) predicted that the industry would grow at a 15% growth rate. A factor contributing to this positive outlook is the fact that many recently launched airlines are operating with the low-cost carrier concept.
Currently, there are 18 scheduled and 35-chartered airlines operating in Indonesia with the total fleet of 375 aircraft. The airline industry is predicted to remain attractive in 2006. Many airline companies have announced plans to expand their routes and aircraft fleets. The Directorate General of Air Communications predicted that Indonesia would need additional 254 aircraft until 2009. Lion Air, Garuda, Adam Air, Merpati and Batavia Airlines announced that they will add more than 80 aircraft to their fleet. Although not all of these firms intend to buy new aircraft, there are excellent opportunities for U.S. aircraft leasing companies to lease their aircraft to Indonesian airlines. In addition, with more aircraft in operation in Indonesia, there will also be a greater need for more aircraft spare-parts and services in the near future.
Indonesia’s imports of aircraft spare-parts totaled $220 million in 2004. In 2005, the total import value increased slightly to $242 million. The import value for American aircraft spare-parts totaled $35.1 million in 2004, and increased to $48.4 million in 2005. The actual import value of US products could be higher than it was recorded, since many Indonesian companies import U.S. products through Singapore intermediaries. The other major suppliers to Indonesia’s market were Singapore, Britain, Japan, France and Germany. With more new aircraft in operation this year, it is predicted that the total market will increase by 20% and the share of U.S. products will be around 20% in 2006.
Best Products/Services
Imports from U.S. suppliers are particularly strong in the following areas: airplanes and other aircraft, parts, aircraft launch gear and parts, engines, engines parts, instruments and appliances for aeronautical use, and aircraft electrical wiring sets.
Opportunities
The Indonesian aviation industry offers excellent prospects for U.S. products since the aircraft fleet consists largely of American aircraft. Almost no aircraft spare-parts are manufactured locally. All parts are imported into Indonesia; with the majority coming from the U.S., Britain, France, Japan and Germany. End-users (primarily the 18 scheduled airlines, approximately 35 non-scheduled airlines, the police and the military) prefer to purchase directly from original equipment manufacturers. The U.S. holds 18 –20 percent of the aircraft and parts market in Indonesia
Resources
PT Garuda Indonesia: www.garuda-indonesia.com
PT Merpati Nusantara: www.merpati.co.id
PT Lion Mentari Airlines: www.lionair.co.id
PT Pelita Air Services: www.pelita-air.com
PT Adam Air: www.adamair.co.id