| JAKARTA, March 7
JAKARTA, March 7 Indonesia's biggest privately
owned airport services provider is seeking to expand in
Southeast Asia, rather than at home, as airport infrastructure
constraints stymie its growth in the world's fifth-largest
market for domestic air travel.
Cardig Aero Services Tbk PT aims to load luggage,
cook food and clean cabins for airlines around the region after
Indonesia's government backed down from letting foreign
companies expedite an increase in airport
"Our servicing capacity depends on airport capacity as well.
As the rate of infrastructure development increases, it will be
better for us," Cardig Deputy Chief Executive Radianto Kusumo
"Our market share in Indonesia has reached 70 percent, so we
are seeking growth outside of the country," he added.
Industry data showed domestic passenger numbers jumped 35
percent in Indonesia in the past four years, boosted by a
steadily expanding economy and a growing middle class.
Cardig, which operates at Indonesia's 17 biggest airports,
expects passenger numbers to rise at twice the growth rate of
the economy by 2019.
Airport capacity, however, is straining to keep up with this
pace of growth and prospects for expansion dimmed in December
when the government decided not to let foreign companies buy
majority stakes in ports and airports because of national
Cardig is targeting two Southeast Asian countries for
growth, Kusumo said, without giving details. Asia's largest
airport services provider, Singapore Airport Terminal Services
Ltd (SATS), last month bought a 42 percent stake in the company.
Cardig's expansion plans could see it running into regional
peers such as Malaysia Airports Holding Bhd and
Airports of Thailand PCL.
At home, state-owned airport services firms are also
searching for other avenues for growth.
Flagship carrier Garuda Indonesia (Persero) Tbk PT
plans to list its airport servicing units or seek partnerships
while state-owned PT Angkasa Pura has formed alliances with
Indian conglomerate GVK Industries Ltd and South Korea's Incheon
International Airport Corp.
"Industry growth will vary, depending on how fast Indonesia
can build new airports. This becomes our concern as we see how
slow infrastructure construction has become," said Dimas
Noverio, fund manager at Samuel Asset Management which owns
Garuda stock and is reviewing Cardig's business.
"We think this industry is still attractive, mostly to
companies that... can integrate their businesses just like what
SATS does to Cardig."
SATS and Cardig plan to cooperate in a range of services,
from managing passenger lounges to handling freight.
Outside of airports, Cardig plans to draw on SATS' know-how
to take its catering business to Indonesia's shopping malls and
trade centres, aiming to dish out 200,000 meals a day over the
next five years from 40,000 meals.
(Editing by Niluksi Koswanage and Christopher Cushing)