Lee Hae-rin is a City Desk reporter at The Korea Times, covering social issues, tourism and taekwondo. She is passionate about speaking up for the rights of minorities, including women, LGBTQ+, people with disabilities and animals as well as discovering the latest makgeolli trend in town. Feel free to reach her at lhr@koreatimes.co.kr.
Incheon airport seeks to develop Batam airport into ASEAN's next gateway
Incheon International Airport Corp. President Lee Hag-jae, right, inspects Batam Hang Nadim International Airport's facilities with PT Bandara Internasional Batam's CEO Pikri Ilham Kurniansyah in Batam, Indonesia, Wednesday (local time). Joint Press Corp.
By Lee Hae-rin
BATAM, Indonesia — Incheon International Airport Corp. (IIAC), the operator of Incheon International Airport, seeks to develop Indonesia’s Batam Hang Nadim International Airport into an ASEAN gateway capable of accommodating 25 million passengers a year by 2046, its operator, PT Bandara Internasional Batam, said, Wednesday.
IIAC signed a public-private partnership (PPP) with the Batam Indonesia Free Zone Authority (BT Batam), which manages the Batam airport, in a consortium with Indonesia’s state-owned airport operator and construction company in April 2021.
The 600 billion won ($463 million) deal is IIAC’s first overseas airport operation and development project, under which the company will renovate, manage and develop the airport’s existing passenger terminal and a new passenger and cargo terminal for 25 years.
Built in 1973, the Batam airport is the Southeast Asian country’s one of five international airports and can accommodate up to five million passengers in its facility renovated by Hyundai E&C in 1997.
The airport had 4.2 million passengers and transported 43,800 metric tons of cargo in 2019. By year-end, it is forecast to receive four million passengers whose overwhelming 98 percent are domestic travelers.
The lesser-known picturesque island city in the Riau Archipelago is Southeast Asian country's third tourism attraction after Bali and Jakarta and receives two million annual visitors, mostly from neighboring Singapore and Malaysia.
Strategically located 20 kilometers from Singapore, the island emerged as Indonesia’s popular Meetings, Incentives, Conferences and Exhibitions (MICE) destination hosting local and global corporate events.
Batam also offers economic benefits as the Free Trade Zone (FTZ) designated by the Indonesian government, the company said.
The island boasts business and income tax cuts as well as special investment incentives. The island has seen continuous economic growth, with the islanders’ GRDP per capita of $7,943, which is over double of Indonesia’s national average.
The project is still in the initial stage with a 5 percent completion rate.
By April next year, the airport will feature Shilla Duty Free Shop beyond the expanded security inspection area, while the warehouse will be expanded into five times the current size.
The airport signage, formerly only Indonesian and English will also feature Korean to commemorate the partnership between the two countries.
Seen is a sign written in Indonesian, English and Korean at an immigration point of Batam Hang Nadim International Airport, Indonesia, Wednesday. Joint Press Corp.
“We expect to offer direct chartered flights between Incheon and Batam around January to February next year, and have regular direct flights by next October,” said Chun Min-jae, the vice president director of PT Bandara Internasional Batam.
Through the 25-year project, IIAC expects to gain a ten-fold turnover amounting to 6.4 trillion won and earn 480 billion won dividend.
As Incheon airport is heavily dependent on global passengers as the country’s international air hub, The company seeks to diversify its profit structure to reduce the risk of profit loss from global issues, such as pandemics and international disputes, the company explained.
Batam, on the other hand, has stable demand for domestic air travel as the Southeast Asian country consists of over 12,000 islands while the dynamic exchange among ASEAN nations forecast potential for more international air travel.
The project has garnered neighboring ASEAN countries’ attention to the IIAC’s experience and know-how in airport management, according to Lee. The company is eyeing signing similar deals with international airports in Kuwait and the Philippines.
“The company will do its utmost to successfully manage Batam airport and win ten additional PPP deals with international airports by 2030 to make the leap to being a global airport operator,” Lee said.