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Technology Partnerships | Joint Ventures
Gapura Angkasa | Mr Agus Priyanto
Mr Agus Priyanto

The primary opportunity available for foreign companies to cooperate with local businesses is through providing technology and ground handling equipment

Mr Agus Priyanto, President Director

Established in 1998, PT Gapura Angkasa is the leading ground handling and airport service provider in Indonesia. What can you tell us about your company’s history and its strategies going forward?

Gapura Angkasa is owned by three state owned enterprises – Garuda, Angkasa Pura I, and Angkasa Pura II. We are currently stationed in 30 locations across Indonesia and have an established presence in the vast majority of airports in the country. The strong domestic growth of Garuda, which recently launched flights to Merauke and Labuan Bajoe and will soon do the same for Jember in East Java, has facilitated a rapid expansion strategy that now has us opening a new office almost every month. By the end of this year (2014), our company hopes to operate out of 40 offices.

We expect that this growth will allow us to achieve a 22% increase in revenue compared to last year. In 2013, 60% of our revenue came from Garuda, a further 10% from its subsidiary budget airline Citilink, and the rest can be attributed to providing our services to international airlines and a number of other domestic carriers.

At Gapura, we divide our ground handling services into two separate divisions. For low-cost carriers (LCCs) we offer Smart Handling and for our full service carriers like Garuda we make available Premium Ground Handling. We are also involved in AHAN (Aircraft Handling Advance Notice); a service that we offer to airlines that don’t have a contract with us but require ground support equipment, which we rent out. This service extends not only to airlines but also to other ground handling companies in Indonesia such as PT Jas. This year, our AHAN operations have grown by 36% and are now one of our top performers. We have also introduced lounge management services as part of our product portfolio as well as passenger assistance services in Indonesia’s larger airports such as those in Cengkareng, Medan, Bali, Makassar and Balikpapan.

What is your outlook for the ground handling industry?

Our line of business is slightly different from other companies in the commercial aviation industry. Whereas airlines are primarily interested in the number of passengers, we focus our outlook on the frequency of flights as this directly impacts the scope of opportunities available to us as a ground handling service provider. The aforementioned expansion of our parent companies, in this regard, builds towards a bright future for this industry in Indonesia and from a company perspective, we expect to see a 29% increase in our production related to Garuda flights and a 20% rise in production due to the growing number of Citilink flights. The increasing frequency of flights from other airlines will also spur our growth. Within Indonesia, we have seen the steepest increase in flights in Jakarta, but the eastern part of Indonesia has considerable potential in the future given its ongoing emergence as a key contributor to Indonesia’s continued economic development.

How will your company pursue innovation and introduce new services to the market?

The rising number of flights has necessitated increased investment in our ground support equipment. This year alone, we will need to spend 65 billion IDR on 24 new pieces of equipment and by 2020 our fleet will need to expand by a further 120. One of the issues that we currently face in Indonesia is that many of these flights choose to arrive at airports during similar time slots, which can make it difficult to optimally allocate our resources and equipment where needed. To maximise our efficiency during peak hours, we plan to move towards more capital intensive processes that make use of the latest technology in ground support. For example, we currently use traditional baggage loaders that need to be manned by 3 staff members.

We hope to soon begin using the more modern ramp snake loaders, which only need 2 staff members to operate and shortens turnaround time by 30%.

We have also prioritised investment in green technology, and already use electricity powered by batteries as opposed to fuel to run our equipment. The modernisation of this company is part of my overarching goal to introduce a corporate culture less encumbered with bureaucracy and inefficiencies, and more agile.

One of the main challenges faced by companies in similar lines of business in Indonesia is the lack of well-trained human resources ready to adapt to new technology. What can you tell us about Gapura Angkasa’s human resources and its plans to address this perceived shortcoming?

Our company employs 15,000 people, with over 3,700 working in the Soekarno-Hatta Airport in Cengkareng. In Indonesia, the minimum wage has over the last few years increased substantially and given the current political climate, it is likely that this trend will continue in the immediate future. As our business is very sensitive to changes in labour costs, we have focused more on investing in new technology. As part of this movement towards capital intensive ground handling, we have increasingly sought after skilled human resources that can work with new equipment as opposed to low skill labour.

Revisions to the negative investment list have opened up the airport management industry to foreign investors. What are your thoughts on this and how is your company positioned towards cooperation with foreign companies?

At present, our company does not require financial capital or foreign investment. The primary opportunity available for foreign companies to cooperate with local businesses is thus through providing technology and ground handling equipment. We are working with European based companies to obtain ramp snake cargo loaders, which were originally developed in Denmark. Products from the European market are typically the most reliable, and this is very important to us given that Indonesian airports have the tendency to quickly cause wear and tear. Roads that are neither smooth nor on flat land can cause equipment to break down within two years if the product is not of the highest quality.

As the company’s recently appointed President Director, what mark would you like to leave on Gapura Angkasa?

I want to be remembered not only as a proponent for modernisation at this company but also as a leader that changed its entire mindset and approach to business. Right now, Gapura is saddled with bureaucracy and operates like a SOE that isn’t cost efficient. Changing this mindset will necessitate a rebranding of our company. It is my goal to introduce a clearer corporate identity and encourage our employees to engage in this initiative so as to build a more unified, target-oriented work environment. By June we plan to implement the rebranding of our corporate identity to emphasise agility, vigour, and dynamism as our key strengths.

What would you like our readers to remember about Gapura Angkasa as a final message?

Our modern fleet of ground support equipment and revamped services position us as a market leader, and because of this we would like to be remembered as the airport service provider of choice in terms of quality and safety for international airlines coming to Indonesia.

Global Business Guide Indonesia - 2014

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