aviation

Airline Passenger Growth Remains Minimal, Analysts Suggest Domestic Routes Lack Appeal

Domestic flight routes are perceived as less appealing, contributing to the minimal growth in the number of passengers for domestic airlines throughout 2024. Data from the Central Statistics Agency (BPS) indicates that the total number of domestic air passengers reached 63.7 million from January to December 2024. This figure represents a 1.76% increase compared to the same period in the previous year, which recorded 62.6 million passengers. The airport with the highest passenger volume is Soekarno-Hatta in Tangerang, accommodating 18.7 million passengers, or 29.30% of the total domestic passenger count. Following this, Juanda Airport in Surabaya reported 5.3 million passengers, accounting for 8.29% of the total. Aviation analyst Alvin Lie noted that the minimal growth in domestic airline passengers is influenced by the unchanged Upper Limit Tariff (TBA) and Lower Limit Tariff (TBB) policies over the past five years. This situation has led airlines to struggle with operational costs, prompting many to reduce flight frequencies or even cut domestic routes. 

"Some airlines are scaling back on domestic routes or frequencies to expand their international routes, which are not subject to TBA-TBB regulations. There are also airlines that have reduced their fleet size, redirecting aircraft to Malaysia and Thailand," Alvin stated to Bisnis on Tuesday, February 4, 2025. Additionally, the number of operational aircraft in Indonesia has decreased to approximately 350 units, driven by low load factors and challenges in filling seats.  

"If the load factor is high and operations are profitable, airlines would increase their fleet without needing incentives. However, the reality is that domestic routes are not financially viable," he explained. Despite their lack of attractiveness, Alvin emphasized that airlines must continue to serve domestic routes as a licensing requirement and as a feeder for international routes. This situation is further evidenced by the difficulties faced by new airlines in sustaining their presence in the domestic market. 

Tag: Central Statistics Agency Domestic Flight