Indonesia-Australia aviation market poised for rapid growth and diversification beyond Bali

Indonesia-Australia aviation has traditionally been dominated by inbound traffic to Bali. The resort island accounts for over 80% of capacity in the market and Australian visitors to Indonesia currently outnumber Indonesian visitors to Australia by a more than six to one ratio. But the market is slowly starting to diversify with more flights linking Australia with the capital Jakarta and secondary Indonesian destinations.

Australia is well positioned to benefit from Indonesia's booming economy as its growing middle class starts to have the income and desire to holiday overseas. The geographic proximity of the two countries means several routes are within the range of narrowbody aircraft, opening up a huge range of new options for LCCs and full-service carriers from both countries.

This is the third report in a series of reports on the Asia-Australia aviation market. The first report looked at the Malaysia-Australia market and the rapid growth of AirAsia X. The second report looked at the Philippines-Australia market and bilateral limitations which are blocking the launch of services from Cebu Pacific. This report looks at the larger Indonesia-Australia market, which has seen significant growth this year and has potential for continued rapid growth over the medium to long-term.