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: IATA, 20 year air passenger forecast, 2015). Indonesian demand for Australian capability and products in the aviation space continues to grow with Australia’s exports to Indonesia in aircraft parts in 2019 valued at US$5.2 million. There are still significant potential opportunities for Australian businesses supporting commercial, general and defense aviation in Indonesia (Source: Trade Map, International Trade Centre, accessed August 2020. Register for free to search: Exports from Australia, product 8803 Parts of aircraft and spacecraft of heading 8801 or 8802, n.e.s., Yearly Time Series).

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 264.2 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 US$857 in the year 2000 to US$4,135 in 2019 (Source: World Bank, GDP per capita (current US$)-Indonesia, 2019).  As the largest economy in Southeast Asia, Indonesia is projected to be the world’s fourth largest economy by 2030.

With 17,000 islands, Indonesia is the largest archipelago, As such, Indonesia’s aviation capabilities are critical to the government’s connectivity agenda, that aims 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 78 Air Operator Certificate (AOC) holders in Indonesia with 1,559 registered aircraft in total (2018). (Source: Indonesian Ministry of Transportation, Indonesian Air Operators, 2018 – Indonesian language only) Out of the total number, 601 units are registered under AOC 121 holders serving commercial routes with capacity above 30 seats and payload above 3,400kg. Major airlines in Indonesia serving domestic and international routes include (in order of fleet size):

  • Garuda Indonesia and their subsidiary Citilink Indonesia
  • Lion Air, and their low cost subsidiary Wings Air, and premium subsidiary Batik Air
  • Sriwijaya Air
  • Indonesia Air Asia – a local subsidiary of Malaysian-based Air Asia

Additionally, domestic airlines include Susi Air, Dimonim Air, Airfast, among others. In total there are 20 passenger airlines and 42 cargo airlines under Indonesian National Air Carriers Association (INACA). (Source: INACA, Civil Aircraft Register, February 2019)

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. In 2018, Indonesia spent US$1.4 billion on MRO for commercial aircraft – the largest across ASEAN. It was expected that this spending would grow by over 6% in 2019. (Source: Frost and Sullivan, Commercial MRO Market in Indonesia 2018-Fee-based access. Access August 2020).

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 relative 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 prioritized 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 34 major airports across Indonesia, Angkasa Pura I (manages 15 airports in Eastern Indonesia) and Angkasa Pura II (manages 19 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 5,300 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.

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 up until 2036, however foreign ownership of airports is limited to 49%. Current and upcoming developments of private airports are 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 (In 2019, the government of Indonesia  have apply a new regulation that make certain transportation equipment and parts are not charged to the Value-Added Tax (VAT)). This policy is designed to ease the process of accessing the parts needed for maintenance and repair within the country. (Source: Indonesian Cabinet Secretariat, The VAT tax will not be applied to the imported transportation equipment and spare parts, July 2019. Indonesian language only)

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 distributors in market.

Please note: This list of websites and resources is not definitive. Inclusion in this list does not imply endorsement by Austrade. The information provided is a guide only. The content is for information and carries no warranty; as such, the addressee must exercise their own discretion in its use. Australia’s anti-bribery laws apply overseas and Austrade will not provide business related services to any party who breaches the law and will report credible evidence of any breach. For further information, please see foreign bribery information and awareness pack.

Contact details

The Australian Trade and Investment Commission – Austrade – contributes to Australia's economic prosperity by helping Australian businesses, education institutions, tourism operators, governments and citizens as they:

  • develop international markets
  • win productive foreign direct investment
  • promote international education
  • strengthen Australia's tourism industry
  • seek consular and passport services.

Working in partnership with Australian state and territory governments, Austrade provides information and advice that can help Australian companies reduce the time, cost and risk of exporting. We also administer the Export Market Development Grant Scheme and offer a range of services to Australian exporters in growth and emerging markets.