Dear #Customer.FirstName#,
 

 
This week guest commentator Peter Smyth, Project Manager Aviation, NZTE writes about Indonesia from a market development perspective and what it means for aviation businesses……  

Indonesia's economy continues to grow at more than six percent per annum. With a GDP of more than a US$ 1 trillion (larger than Malaysia, Singapore and Thailand combined), the economy is set to increase to US$2.5 trillion by 2020 and US$ 4.7 trillion by 2025, putting Indonesia well inside the 10 largest economies in the world.
Growth is largely being fuelled by consumer demand from the burgeoning middle and affluent classes (MAC) - the largest and fastest growing in all of South East Asia. Currently around 70 million, MAC consumers will double to 150 million by 2020. There are more than 22 Indonesian cities with a MAC population of over 500,000, by 2020 there will be 55, emphasising that a large part of the growth will come beyond Jakarta.
Not surprisingly, the Indonesian aviation industry is also rapidly growing. With 233 airports (29 international), the fastest growing international airport in the world (Jakarta) and record numbers of plane orders by Garuda and Lion Air, there has been double digit growth in passenger numbers. An aggressive programme of airport expansion and redevelopment is currently under way and Indonesia desperately needs more trained staff across all parts of its aviation industry.
However, there are challenges for Indonesia including: the development of aviation policy; obtaining aircraft quickly enough; acquiring sufficient trained staff; upgrading and expanding training capability; subsidies on fuel and the possibility of change; commercial aviation emissions; ticketing connectivity and scheduling between trunk and regional routes; the existing regulatory framework; and infrastructure development to support anticipated growth.
 
Indonesia recognises that growth projections will only be achieved with international input.  So there are opportunities for New Zealand particularly in aviation advisory services, training, airport design and fit-outs, the MRO sector and supplying aircraft.
 
Not surprisingly there is considerable international focus on the Indonesian aviation market and the challenge is to articulate the New Zealand value proposition - why we are different, why should Indonesia buy from us, what we can do to help their industry grow and prosper?
 
New Zealand does have advantages. Under the ASEAN, Australia and New Zealand Free Trade Agreement, by 2015 New Zealand exporters will receive tariff-free access for more than 90 per cent of tariff items, compared with only 11 per cent before the agreement entered into force. The Bilateral Air Services Agreement between Indonesia and New Zealand, with a proposed Aviation Cooperation Article is also currently awaiting an Indonesian response.

More than 20 New Zealand aviation companies are pursuing opportunities in Indonesia in airport infrastructure, training and consultancy and several are in the running for some very large projects. In May, 32 New Zealand companies visited Indonesia as part of a multi-sector trade mission organised by NZTE, ASEAN Combined Business Council and Export New Zealand. The mission visited Jakarta, Bandung and Surabaya, as well as Bali, and had a strong aviation flavor, along with the geothermal, education, engineering, food, and tourism.

Aviation New Zealand supported the planning and co-ordination and accompanied companies on the mission which was led by Hon Maurice Williamson.  A high-level New Zealand forum in Jakarta was a chance for Indonesia and New Zealand to reflect on the bilateral relationship and ponder how trade can be further increased.

During this mission, companies were also able to share their experiences. Indonesia is a hard market to crack remotely. Regular in-market visits are necessary and a two to three-year commitment is required to succeed. A local presence is a must if Kiwi companies are to build long-term sustainable businesses in Indonesia and several already have a committed presence or representation in Indonesia, or have a track record of product sales. Too many companies try to manage from a distance through traditional sales means and it’s hard to understand the problems New Zealand aviation companies can solve for potential customers from afar.

There is also comparatively little knowledge of New Zealand and its aviation strengths in Indonesia so there is a need to build relationships and understanding, and to appreciate the regulatory environment. 

Aviation NZ and NZTE are working on new marketing collateral which will be available to companies to better tell the New Zealand story and provide a customer centric umbrella strategy for individual product and services pitches. It should be available on the Aviation NZ website by the end of October.

Since the mission, there has been sustained engagement with Indonesia from individual companies.  Aviation New Zealand is seeking to develop and sign a Memorandum of Cooperation with one of the agencies visited in May. The agency wants future engagement with New Zealand to be coordinated and believes a MoC will help achieve this, while giving further legitimacy to commercial arrangements.

It’s clear from this ‘customer steer’ that better solutions require collaboration which, in turn, needs commitment and perseverance. However, with a New Zealand focus on Indonesia and strong Aviation NZ involvement, there are strong potential gains available.

Have a great week end regards Pete
 

Debrief on creation of new Logistics Division members of AEANZ and Supplies and Services met in Auckland on 9 October to form the Logistics Division.  An executive committee headed by Dave Evans (Service IQ) with Rob Bolton (Petroleum Logistics) as his deputy was elected.   More info to come on this group.
 
 
Promotion of New Unmanned Pilot Group - never has a group ever had some many different names. Remotely Piloted Vehicles is the given name by CAA click here.  We have a core of eight but want to build a large and vibrant group.  A first meeting is being planned for around 5 November in Christchurch.
 
 
Complaint to Regulations Review Committee filed click here please note this document is confidential and privileged and is not to be distributed or passed to persons who are not members of this organisation. Confirmation has been received from the Committee that the Committee will consider our complaint
 
Next steps – our complaint will be considered by the Regulations Review Committee on 17 October when it next meets.  We have requested that we speak to the Submission. This request will be considered at this meeting.
 
Keep the information rolling in about the impact on your business.  We now have around 30 examples from a broad spectrum of businesses, and please keep donating to our fighting fund.     
 
IFR design Unattended Aerodrome click here for CAA’s outline of the framework. We are in discussions with both the Airports Association and Airways.  If you operate one of the following aerodromes or know who does can you please contact us: - Alexandra, Ashburton, Hawera, Kaikoura, Kupe Heliport, Maari Heliport, Mechanics Bay Heliport, Motueka, Northshore, Picton, Taumaranui Heliport, Tokoroa, Tui Heliport, Whitianga, Te Kuiti and Wellsford – our objective is very much to ensure we make compliance with CAA’s requirements as painless as possible for all parties    
 
Aging Engineers - a big thank you to the companies who answered the questions but we need more responses click here
 
October 15 CAA 1300-1600 Radio Frequency Outside of Controlled Airspace  click here - if you have a view please ensure you attend the meeting.  We understand one of the problems being struggled with is that there is no clear consensus as to how best to resolve the issue.  The battle lines are not drawn yet but quite clearly this is a pretty controversial issue in some circles.
 
24 October Productivity Council Submission on Regulations - this is an opportunity to comment about risk based rule making
 
24 October – Wellington open meeting with Airways Board Venue:   Royal Port Nicholson Yacht Club, 103 Oriental Parade, Oriental Bay. Time: 10am for morning tea, 10.30 meeting starts. RSVP:  Paola Brett, paola.brett@airways.co.nz

30 October First meeting of Training and Development Division - 10.30, Level One Aviation House.   
 
6 November – whole of Government/Industry meeting - we are sending out invitations to all aviation businesses from a line Hamilton-Tauranga North.  All are welcome. Who is present from Dale Webb and Graeme Martin, government NZ Trade & Enterprise (Peter Smyth Aviation Project Leader), Ministry of Foreign Affairs and Trade (Rupert Holborow, Director Economics Divn), Ministry of Transport (Glen-Marie Burns, Manager Aviation), CAA (John Kaye GM), Callaghan Innovation (not sure who will attend yet) and potentially Ministry of Business Innovation and Employment.  It’s an opportunity to hear from government about how they are supporting the growth agenda and express your views on direction and concerns.  We will be holding more of these meetings throughout the year ahead.  Also a big thank you to our sponsors on this occasion ........  
29 November GD on Colour Vision - comments close

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