Why Incheon Airport Chose to Operate Indonesian Airports as a New Business

Renovation and Expansion of Indonesia Batam International Airport Underway
Incheon International Airport Corporation Takes Lead in Airport Operations
First Domestic Overseas Airport Operation and Development Project
"Batam Has Ample Appeal as a Tourist Destination and Transit Hub"
Dividend Profit of 480 Billion KRW Expected from 2028

On the morning of the 22nd at Hang Nadim International Airport Terminal 1 in Batam, Indonesia, construction and renovation work was in full swing in 20 out of 54 zones. On the right side of Terminal 1, a prayer room for Muslims was under construction. Inside, fences were set up to make space for additional security checkpoints. Temporary checkpoints were installed in other areas, ensuring no disruption to airport operations.

After the peak season in December, major construction will begin at the second-floor departure hall where the security checkpoints are located. The security checkpoint will be relocated, and a new Shilla Duty Free store is scheduled to open in its place. The international departure lounge is undergoing a complete overhaul, including restrooms, floors, and ceilings. Once remodeling is completed next year, the airport’s capacity will increase from the current 5 million to 10 million passengers annually.

Cargo terminal construction is also underway. This island, the only free trade zone in Indonesia, offers the advantage of shortened customs procedures as no taxes or value-added taxes are imposed on imported goods. A representative from Incheon International Airport Corporation stated, "We are currently discussing contracts with Indonesian logistics companies to operate the cargo terminal."

On the morning of the 22nd (local time), Lee Hak-jae, President of Incheon International Airport Corporation (second from the left), and Bikkuri Ilham Kurniansyah, CEO of Batam International Airport Corporation (third from the left), are observing the remodeling work at Hang Nadim International Airport in Batam, Indonesia.
Photo by Oh Kyu-min moh011@

The airport currently covers an area of 3.66 million square meters, about one-tenth the size of Incheon Airport. It has one passenger terminal and one cargo terminal, with 10 airlines operating 21 routes (18 domestic and 2 international). The airport was remodeled once in 1997 by Hyundai Engineering & Construction.

After Incheon International Airport Corporation began participating in airport operations, a second terminal is planned to be built once the renovation of Terminal 1 is completed. Jeon Min-jae, Vice President of Batam Airport Operation Corporation (a company invested in by Incheon Airport Corporation), said, "By 2047, the airport is expected to handle 26 million passengers annually."

The security checkpoint at the second-floor departure hall will be relocated, and Shilla Duty Free is scheduled to open in its place.
Photo by Oh Gyumin moh011@

Incheon International Airport Corporation has embarked on its first overseas project with the special mission of developing Indonesia’s third major airport. The corporation proceeded with the project after highly evaluating the growth potential of Indonesia and Batam. The plan is to transfer Incheon Airport’s expertise and develop it into Indonesia’s third airport by 2047.

In 2019, Incheon Airport Corporation bid for the construction, operation, and maintenance of Batam International Airport in Indonesia. It formed a consortium with AP1 (Angkasa Pura 1, Indonesia’s primary airport operator managing 15 airports) and a local construction company, winning the bid after competing against three other multinational consortia from France, India, and Switzerland.

On the morning of the 22nd (local time), the international departure lounge at Hang Nadim International Airport in Batam, Indonesia, was undergoing a complete renovation from the restrooms to the floors and ceilings.
[Photo by Oh Gyumin moh011@]

This contract marks the first time a Korean company has secured an overseas airport operation and development project. It is the largest contract since the corporation established its overseas business division in 2007. The project budget is approximately 600 billion KRW, with the corporation investing 48.6 billion KRW. Since last year, it has been tasked with renovating Terminal 1 and constructing Terminal 2 at Hang Nadim International Airport in Batam until 2047. Additionally, it is participating in airport operations and route development.

The corporation joined the operation business considering Batam’s growing market. Located about 20 km from Singapore, Batam was designated Indonesia’s first free trade zone in 2009 due to its geographic advantage. The region’s per capita gross production is $7,943 (about 10.23 million KRW), higher than Indonesia’s average of $4,332, ranking fourth among 34 provinces. It is also the third most visited tourist destination in Indonesia after Bali and Jakarta, attracting 2 million visitors annually.

Based on this analysis, the corporation is devising marketing strategies. First, it plans to enhance Batam’s appeal as a final destination. Batam already has golf courses and tourism infrastructure, with affordable massages and seafood priced at about half the cost of Singapore. Batam Airport Operation Corporation is collaborating with the Indonesian government to establish direct flight routes. Discussions are underway with Korean low-cost carriers (LCCs) such as Jeju Air, Jin Air, and T’way Air for route development.

On the afternoon of the 20th (local time), Choi Doo-seon, Marketing Director of Batam Airport Operation Co., Ltd., held a business briefing session for the press regarding the "Indonesia Batam Airport Investment and Development Project" at the Radisson Hotel in Batam, Indonesia.
[Photo by Airport Photographers Group]

There is also a plan to develop Batam as a transit airport. Specifically, the goal is to make Batam the third gateway airport of Indonesia (an airport serving as a country’s main international gateway). Indonesia is a long country stretching from west to east, with the distance from its westernmost to easternmost point similar to that between Incheon and Jakarta. However, only Jakarta and Bali currently serve as gateway airports. Since these two airports are already heavily used, Batam Airport is being developed to help distribute passenger traffic.

They are also considering connecting the Northeast Asian market with Indonesia. Incheon Airport currently operates 40 routes to China and 19 to Japan. The plan is to capture demand by having passengers travel from other parts of Indonesia to Batam Airport, then fly to or transit through Incheon Airport. Choi Doo-seon, Marketing Director of Batam Airport Operation Corporation, said, “We are planning diverse marketing strategies to create synergy through routes connecting Batam and Incheon airports.”

The corporation forecasts significant benefits from the Batam Airport project. Alongside the corporation, Korean companies in airlines, construction, IT, and duty-free sectors are entering the market, exporting the ‘K-Airport’ platform and contributing to national economic revitalization. LCCs are developing new routes. Korean SMEs such as Geunjeong Architecture have taken charge of the airport’s architectural and civil engineering design. Shilla Duty Free is scheduled to open a store at Batam Airport. Project funding is being secured through Korean banks already operating in Indonesia, such as Shinhan Bank. Batam Airport Operation Corporation predicts that from as early as 2028 through 2047, it will earn approximately 480 billion KRW in dividend income from operating the project.

This content was produced with the assistance of AI translation services.