Indonesian airlines have had a long history. Various airlines have graced the skies of Indonesia, although not all of them survived to flap their wings in the sky of the archipelago.

On December 28, 1949, the NV Garuda Indonesia Airways (GIA) aircraft became the aircraft of the national airline which flew the first from Kemayoran to Yogyakarta. At that time, the plane was flown to pick up President Soekarno who had moved to the new capital city in Jakarta.

At that time, GIA had 26 aircraft ready to operate, consisting of 11 Douglas DC-3s, 12 cargo planes, and three Catalina seaplanes for pioneer flights.

GIA is a continuation of Indonesia Airways formed by the Governments of Indonesia and the Netherlands, as a result of the agreement of the Round Table Conference in The Hague, in November 1949.

According to the paper “Nationalization of Garuda Indonesia 1950-1958” (Dwi Adi Wicaksono, 2016), when it first started operating, GIA already had a large number of company assets. A large number of assets cannot be separated from the joint venture with the Dutch airline KLM-IB, which has been operating in the Dutch East Indies since 1928.

A year later, the civil aviation market in Indonesia is growing rapidly. The enthusiasm of GIA passengers exploded. In the first two years of operation, GIA managed to carry 288,331 passengers. The passenger occupancy rate is relatively high with an average of 76 percent. In 1951-1953, the number of GIA passengers increased 6.7 percent to 307,757 passengers, while cargo and airmail transported reached 540 tons.

Within the aviation market in Indonesia at that time, apart from its position as an aviation pioneer, GIA also maximized old and new aircraft to increase flight frequency. GIA also streamlines routes that have developed since the colonial era, and promotes through newspapers, and tries to increase the number of ticketing booking agents.

After 12 years of operation, GIA is finally off the air on its own. On September 6, 1962, the State Company Merpati Nusantara Airlines (MNA) was established. The airline with the slogan “Indonesian Air Bridge” relies on six aircraft to connect remote places in Kalimantan, including 2 DC-3 Dakota and 4 DHC-3 Otter.

In 1990 MNA grew, marked by the ownership of 100 aircraft to serve domestic and international routes. The successful MNA finally stopped its operations in 2014 due to financial problems with creditors.

Apart from flag carriers, private airlines also used to fly during that period, such as Sempati Air. There are also Pelita Air and Mandala Air which both stopped at the same time as MNA, in 2014.

While Bouraq Airlines was founded in 1970 with an initial capital of three DC-3 Dakota. In the 1990s, this airline won the title of the private airline with the best punctuality for domestic flights. However, post-monetary crisis, Bouraq continued to fade and eventually went out of business in 2005.

New Airline Incoming

According to history, the milestone in Indonesian civil aviation actually started 70 years ago, on January 26, 1949, when the DC-3 Dakota aircraft “Indonesian Airways” registered RI-001, departed from Calcutta, India, to Rangoon, Burma (now Myanmar). This charter flight is to help the Burmese Government overcome its domestic political problems. The plane was purchased from the donations of the people of Aceh.

The 1990s became a milestone for many new airlines in Indonesia. This cannot be separated from the birth of Law No. 15/1992 on Aviation and Government Regulation No. 40/1995 on Air Transportation. These two regulations are one of the deregulation factors that allow the establishment of commercial air transportation businesses in Indonesia by more people, both from state-owned enterprises (BUMN) and private companies.

The forerunner of major airlines that still survive today comes from this period. For example, Lion Air was founded on November 15, 1999, by Rusdi Kirana. Initially only relying on two Boeing 737-200 aircraft, the airline now has hundreds of aircraft of various types with a passenger volume of more than 33 million people (2018). Lion Air is the first airline in Indonesia.

Apart from Lion Air, there is also Citilink Indonesia, which was established on July 16, 2001. This state-owned airline is a business strategy unit of PT GIA. Initially operating, Citilink only served the Surabaya-Balikpapan-Tarakan route using two Fokker F28 Fellowship aircraft. The low-cost airline (LCC) segment and the big-name Garuda Indonesia make Citilink one of the most sought-after. In 2018, it was recorded that there were 15 million passengers that Citilink had successfully transported and this figure was ranked third.

There is also Susi Air which has been operating since December 27, 2004, to coincide with the earthquake on the west coast of Sumatra. Relying on two Cessna Grand Caravan aircraft, Susi Air participated in the distribution of aid to disaster areas. Since then, the pilot airline Susi Pudjiastuti has received charter flight services. It was only in 2006 that scheduled commercial flights began to be developed, based in Medan. Until 2015 the airline had 32 commercial routes, and in 2018 it managed to carry 41.6 thousand people.

Lion Air, Citilink, and Susi Air, are only some of the airlines that survived. The Ministry of Transportation noted that until 2018 there were at least 16 scheduled commercial airlines that were still operating in Indonesia. A total of 14 of them came from airlines born in the period 1990 and above. These include Trigana Air Service, which was established in 1991, Indonesia Airasia (1999), Sriwijaya Air (2003), Wings Abadi Airlines (2003), XpressAir (2003), Cardig Air (2004), Transnusa Aviantion Mandiri (2005), Batik Air (2013 ), Nam Air (2013), and Indonesia Airasia Extra (2013).

Meanwhile, for those who stop operating, this is not only due to the company’s financial problems, but also related to safety factors. For example, Adam Air whose flight operator license was revoked by the Ministry of Transportation, in 2008. The revocation of this license was carried out because the airline was deemed to have neglected safety in the crash of the Adam Air Boeing 737 numbered in Majene waters on January 1, 2007. The disaster killed all passengers and cabin crew, 102 persons.

Defensive strategy

It is not easy for air transportation service actors to survive in the midst of intense competition in the aviation business in Indonesia. There are at least three factors that have a positive effect on the competitive advantage of airlines, including flight routes, service quality, and promotions. Each airline has a different strategy to apply these three factors.

For example, even though others serve LCC flights, in 2018 Lion Air was superior to Citilink in carrying the number of passengers. The success of Lion Air is also influenced by a large number of destination cities and the frequency of flights. According to data, throughout April 2019, Lion Air served more than 51 destination cities with an average of 400-420 flight frequencies per day. Meanwhile, in July 2018, Citilink only served 35 destination cities with an average of around 274 flight frequencies per day.

The variety of flight routes has also made a number of pioneer airlines stay afloat. For example, the Medan, North Sumatra-Meulaboh, Aceh route, which is only served by Wings Air. Likewise, the Jayapura-Tanahmerah route in Papua is only served by Trigana Air.

Promotional factors by airlines can be in the form of low prices long before departure, ticket discounts, baggage promos, and marketing through advertisements. For example, a 70 percent discount from AirAsia for a number of their flight routes for the period October 7–October 13, 2019. This promo ticket booking is for flights one year ahead. Likewise, Sriwijaya Air, once provided a 10 percent discount for BPJS Employment owners in 2018.

The long history of Indonesian airlines and the number of passengers carried show that this mode of transportation has become the main means of connecting Indonesia. Indonesia’s geographical condition as an archipelagic country makes airplanes the most effective and efficient means of connecting. However, it cannot be denied that airline operations have very high risks.

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Putu Deny Wijaya

Putu Deny Wijaya was always an aviation enthusiast by heart, growing up in Indonesia where air transport is very vital. His first love is The Queen of The Skies, serving the trunk routes between Jakarta and Denpasar. He brought along this passion with him throughout college by conducting his bachelor study abroad in the Netherlands for the purpose of experiencing a nonstop 14-hour long-haul flight. For Putu the sky's the limit when talking about aviation. He hopes that he would be able to combine his passion for aviation and knowledge of finance at the same time.

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