Indonesia is Business Aviation’s New Hotspot in Southeast Asia

 - April 1, 2012, 3:10 AM

February’s Singapore Airshow confirmed a trend that has been brewing for some time: that Indonesia is emerging as a business aviation hotspot in the Asia Pacific region. Last year the country’s economy grew at its fastest pace since the 1997-98 Asian financial crisis, with gross domestic product expanding by 6.5 percent.

All this growth means that people are on the move, which doubtless prompted the recent mammoth order for 237 Boeing airliners placed by local carrier Lion Air. But the growth is also apparent in the business aviation sector, with Lion Air also having just ordered a pair of Hawker Beechcraft Hawker 900XPs (plus options for two more).

According to the Financial Times, operators placed roughly $250 million worth of orders for private aircraft over the past 12 months, including contracts for products from Cessna, Hawker Beechcraft, Bombardier, Boeing Business Jets, Embraer and Gulfstream. The newspaper also reported that the number of Indonesian billionaires doubled to more than 20 last year as the collective wealth of the 40 richest individuals swelled by some $30 billion.

“Indonesia is the next big up-and-coming area,” Dan Keady, Hawker Beechcraft’s vice president for Asia and India, told AIN. “We sold four 900XPs there in the last quarter of 2011. We are starting to see [wealthy] individuals related to the mining industry take interest, as well as government flight inspection departments.”

Jean Michel Jacob, vice president of international sales for Dassault Falcon Jet, agreed, emphasizing that Indonesia’s dispersed geography makes a good case for using business aircraft. “There are 1,700 islands and lots of big industries,” he explained. “As people become wealthy they need to have comfort.”

Other manufacturers report keen interest from Indonesia. “We are getting requests from the usual players there,” said Francois Chazelle, vice president of worldwide sales for Airbus Corporate Jets. “People want to travel long distance in the region.” He pointed to the inconvenience of traveling commercially, and said, “It is useful to have a private jet based in Jakarta, either for business or personal travel. This will stimulate growth.”

Similarly, Ernest Edwards, president of Embraer’s Executive Jets division, agreed that the archipelago is a sweet spot for the Brazilian airframer. “We just delivered a Lineage1000 in Indonesia and see it as an up-and-coming market,” he told AIN.

Several business aviation service and systems providers share the optimism manufacturers have for the reborn Indonesia market. “The strongest potential market for private jets is China, but we are seeing that Indonesia and the rest of Southeast Asia are not far behind,” commented Keith Morgan, a director of TAG Aviation Asia.

Aircraft owners are pressing Indonesia’s Directorate General of Civil Aviation (DGCA) to boost market conditions with more user-friendly regulation, including the certification regime. Evidence of this improved environment comes from the country’s largest charter operator, Enggang Air Service is installing full satellite communications connectivity in one of its Embraer Legacy 600s. “This is a significant milestone for our industry,” said Gerry Soejatman, solutions manager for aviation and defense services with the satcom system’s provider, PT Dini Nusa Kusuma. “We have been working alongside the DGCA to overcome the challenges of installation.”