Indonesian Government may increase capital spending in the 2011 state budget may rise by IDR26.6 trillion (USD2.96 billion) to IDR121.7 trillion (+28%) in 2011 in an effort to increase infrastructure development (Bloomberg, 16-Aug-2010). A higher infrastructure budget will assist in the construction of 14 new airports, 850 km of railways and improve the capacity of 2,613 km of roads. President, Susilo Bambang Yudhoyono stated the government plans to reduce the state budget deficit next year to 1.7% of GDP from 2.1% of GDP assumed in the 2010 budget.
Indonesian Government plan to boost 2011 infrastructure spending: 14 new airport
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Southeast Asia’s low cost airline fleet grew by only 7% in 2016, representing the slowest growth in several years. The region’s two main groups, AirAsia and Lion, both slowed their growth significantly, with AirAsia slightly reducing its Southeast Asian fleet in 2016.
Southeast Asian LCCs ended 2016 with a fleet of 623 aircraft – up a modest 41 aircraft compared to the beginning of the year. The same group of 21 airlines added 67 aircraft in 2015 and 61 aircraft in 2014.
Several airlines responded to overcapacity, which peaked in 2014 following a period of overzealous capacity expansion, by deferring aircraft deliveries. Overcapacity continues to persist in several Southeast Asian markets, but some LCCs are reaccelerating expansion in 2017. Given the sector’s huge order book it is likely 2016 will represent the low point in Southeast Asian LCC fleet growth.
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CAPA’s 2016 outlook was against a background of unusually high levels of profitability for airlines.