Aviation and Aerospace to Indonesia

Trends and opportunities

The market

Indonesia is among the five fastest-growing aviation markets in passenger movements per year with a forecast of 135 million new passengers for a total of 242 million annually by 2035 (Source: https://airlines.iata.org/sites/default/files/P18-22_IATA_64_CEO%20WestJet.pdf). Indonesian demand for Australian capability and products in the aviation space continues to grow with Australia’s exports to Indonesia in aircraft parts in 2018 valued at $A3.6 million. There are still significant potential opportunities for Australian businesses supporting commercial, general and defence aviation in Indonesia (Source: http://www.trademap.org).

This rapid growth in the aviation industry will fuel demand for aircraft, flight training, Maintenance, Repair and Overhaul (MRO) capability, airport design and operation and all relevant aviation fields.

Market Overview

Indonesia is the largest of the ASEAN economies. With a population of 260 million and a growing middle class of around 45 million people, nominal GDP in Indonesia is valued at over A$1 trillion. The country’s GDP per capita has steadily risen, from $857 in the year 2000 to $3,847 in 2017 (Source: https://www.worldbank.org/en/country/indonesia/overview). As the largest economy in Southeast Asia, Indonesia is projected to be the world’s seventh largest economy by 2030.

With 18,000 islands, Indonesia is the largest archipelago in the world and as an archipelagic nation, Indonesia’s aviation capabilities are critical to the government’s connectivity agenda to make the remote areas of Indonesia less isolated and strengthen international and intraregional transportation.

The aviation sector in Indonesia is of significant strategic importance to support Indonesia’s economy.


According to Indonesian Ministry of Transport, there are 100 Air Operator Certificate (AOC) holders in Indonesia with 1644 units of registered aircraft in total (2017). Out of the total number, 573 units are registered under AOC, 121 holders serving commercial routes with capacity above 30 seats and payload above 3400kg. Major airlines in Indonesia serving domestic and international routes are Garuda Indonesia, Batik Air, Lion Air, Sriwijaya Air, Indonesia Air Asia, Wings Air, and Citilink Indonesia. Additionally, domestic airlines include Susi Air, Dimonim Air, Airfast, and others. In total there are 17 scheduled airlines and 22 non-scheduled airlines under Indonesian National Air Carriers Association (INACA).

At this stage, foreign ownership of commercial airline transportation remains limited to a maximum of 49%.

Maintenance Repair and Overhaul (MRO)

The growth in air traffic is driving demand for MRO services and manufacturing. According to Indonesian Ministry of Industry, the domestic aircraft MRO operations have grown by 9% in the last five years, and the industry is estimated to be valued at US$2.2 billion by 2025 (Source: https://www.republika.co.id/berita/en/national-politics/18/02/02/p3j39f414-aircraft-maintenance-industry-grows-by-9-percent-in-5-years).

The need for MRO is set to increase at such a pace that foreign companies will continue to play a major role in providing maintenance services to Indonesian carriers due to a limited domestic capacity to service this growth.

Major MRO companies in Indonesia are Garuda Maintenance Facility (GMF), Batam Aero Technic (BAT), Indopelita Aircraft Services (IAS), Merpati Maintenance Facility (MMF), Nusantara Turbine Propulsi (NTP) and FL Technics. A newcomer in the industry, Sriwijaya Maintenance Facility (SMF), successfully obtained its licence as an Approved Maintenance Organisation (AMO) from the government regulator in 2016.

Indonesia is looking to further develop their MRO Industry with a plan for an MRO Hub in Batam and Bintan, just off Singapore.

Aviation Training

Indonesia’s aviation industry in general is still under capacity and its rapid growth is outpacing the recruitment of an adequately skilled workforce. The skills’ deficit is even more pressing given the ASEAN Open Skies agreement which came into force in 2015.

Leading Aviation training providers in Indonesia are Curug Pilot School, Bali International Flight Academy (BIFA), Bandung Pilot Academy, Merpati Training Centre, Deraya Flying School, Lombok Institute of Flight Technology, and many more. These providers are open to foreign cooperation with many already utilising existing agreements and all expressing a desire for additional international partnerships.

Airport Infrastructure

The Indonesian government has prioritised the urgent development of infrastructure across the archipelago.

The Government aims to develop 46 new airports by 2030, as stated in the Indonesian Ministry of Transport 2030 Airport Master Plan.

In total there are 367 airports in Indonesia. There are currently two airport operators managing 26 major airports across Indonesia, Angkasa Pura I (manages 13 airports in Eastern Indonesia) and Angkasa Pura II (manages 13 airports in Western Indonesia). The remaining smaller airports are managed by Indonesian Ministry of Transport, 42 Indonesian Air Force bases, and local government initiated projects such as West Java International Airport / BIJB.



Indonesia currently requires an additional 4,000 new pilots, 7,500 new engineers and 1,000 new air traffic controllers. Aviation management, pilot training and general middle management training in aviation is needed.

Indonesia is estimated to have an annual pilot shortfall of between 700 to 1,000. This is also exacerbated by the issue with recent graduates who were deemed not up to standard by the Indonesian government (600 jobless new pilots) (Source: https://en.tempo.co/read/915160/transportation-minister-addresses-new-pilots-unemployment). In most cases these candidates failed on their intake test due to a lack of aeronautical knowledge and a low test score in their English for International Communication (TOEIC). Many aviation schools in Indonesia were closed in 2018 due to poor quality standards, following an independent audit arranged by the government. Flight schools are interested in international cooperation and each school’s requirements are slightly different. This means a direct conversation is required to see where the possible synergies may lay.

Maintenance Repair and Overhaul (MRO)

Indonesia also has ambitious plans to develop its MRO sector and requires skills training, technology development and collaboration in maintenance training and livery painting (for example), among others. A growing MRO market will also increase the need for qualified aircraft engineers, technicians and mechanics. The MRO sector is interested in partnering with companies for training, technology transfers, obtaining CASA, EASA and FAA approvals and ensuring a consistent supply of aircraft parts and products.


Opportunities in the airport infrastructure investment space are valued at $A22.9 billion until 2036, however foreign ownership of airports is limited to 49%. Current and upcoming developments of private airports are Kertajati International Airport in West Java (ongoing), Gudang Garam Airport in Kediri (construction starts in 2019) and the new Yogyakarta airport complex.

Competitive environment

The airline sector is highly competitive with many international players (US, France, Canada and China) already established and looking for ways to sell their products and services in Indonesia.

To successfully market to Indonesia’s aviation industry, you may wish to consider:

  • participating in major local aviation trade exhibitions and highlighting your international track record to customers
  • engaging a local distributor (crucial to effective business penetration)
  • visiting the market on a regular basis and investing time to build relationships, which are particularly important in this market
  • opening a representative office or having a presence.

Customers in Indonesia have shared with Austrade that they prefer to cooperate with foreign companies with a local representative office or distributors based in-market. This will increase their confidence when engaging with foreign partners in terms of after-sales service.

Tariffs, regulations and customs

To find out the specific tariffs pertaining to the export of your product to Indonesia, you may enter the unique HS product code at (ASEAN) Tariff Finder, or at Indonesia National Single Window.

In late 2015 through the eighth Economic Policy Package, the government deregulated the process of sending spare parts into Indonesia with 0% tax. This policy is designed to ease the process of accessing the parts needed for maintenance and repair within the country.

Regulatory environment & accreditation requirements

Indonesian government regulates all aviation-related activities under Aviation Act Number 1 Year 2009. Detailed technical procedures to obtain necessary certification and operation requirements are highlighted in the civil aviation safety regulation (CASR):

  • CASR 145 Approved Maintenance Organizations
  • CASR 135 Air Operations Certification for Commuter and Charter Air Carriers
  • CASR 121 Air Operations Certification and Operating Requirements Domestic, Flag and Supplemental Air Carrier
  • CASR 141 Air Operations Certification and Operating Requirement for Pilots Schools

Marketing your products and services

Distribution channels

Indonesia’s aviation industry and manufacturing base is concentrated in Java and Batam. For distribution of components and parts, Austrade can assist in connecting companies to Tier 1 and Tier 2 suppliers in market.

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Contact details

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