Aviation Sector and Open Skies Chris Whittle IndII Wrap-up Conference 14 th June 2011

2 Aceh to Jayapura 5,000km 5 hrs 40 min Los Angeles to New York 3,950km 4 hrs 30 min London to Jeddah 4,730km 5 hrs 25 min

3 Major Player On World Aviation Stage World’s 17 th largest economy with rapidly growing middle class Strong demand growth Jakarta largest and fastest growing airport in ASEAN Indonesian airlines increasing fleets New capacity planned at main international airports

4 Demand Growth + Forecast (Indonesia)

5 Growth of Jakarta

6 Aircraft Orders

7 New Airport Capacity Jakarta Airport: Masterplan in progress Medan: new airport Bali: new international passenger terminal Balikpapan: new international passenger terminal

8 Implementation of ASEAN Open Skies Policy Goal  A strategy for implementation of regional (ASEAN) Open Sky policy in 2015 (planned date) Objectives  Accommodate ASEAN Open Sky policy in national aviation law  Prepare national aviation industry for regional competition  Assess the benefits of ASEAN Open Sky policy for Indonesia Deliverables  Road map for the development and implementation of the ASEAN Open Sky Policy in Indonesia in 2015 (planned date)  Detail steps to be taken by the “implementers”, including the government, carriers and airport operators

9 Description of Activity Components Interdependence of the tasks

10 Open Skies Benefits Benefits significantly outweigh costs:  Additional 16.3m international passengers; 99,000 aircraft movements; 291,000 tonnes of air cargo in 2025  Baseline impact (2010): 243,000 jobs and GDP IDR 33.7 trillion  2025: 505,000 jobs and IDR and GDP trillion  Positive net flow of costs and benefits to Indonesian users - Net Present Value of IDR 21.9 trillion and Benefit Cost Ratio of 5.4 Most benefits accrue to Jakarta and other larger airports Benefits could be greater by extending scope of Open Skies Strong case for a more liberal approach towards the development of air services with other world regions.

11 Other Aviation Projects Indonesia Air Traffic Management Masterplan  A strategic road map for development of future Air Traffic Management requirements Bali Airport Development options  Opportunities can be realised in short /medium term from optimumuse of existing terminal and runway infrastructure.

12 Opportunities (1) Implementation of Open Skies Infrastructure bottlenecks: – National Airports Masterplan – Optimise existing terminal and airside infrastructure (Bali example) – Upgrade surface access to airports Development of human resources Align air transport with development of economic corridors

13 Opportunities (2) Reduce impact of peripherality Airline compliance and conformity