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Indonesia Targets Batam, Jakarta, Surabaya and Makassar as National MRO Hubs to Cut Airline Costs
Indonesia is positioning itself as a regional powerhouse for aircraft maintenance, repair and overhaul (MRO) services, announcing a plan to build national MRO centers in Batam, Jakarta, Surabaya and Makassar. The government unveiled the strategy at the Indonesia MRO Summit in Batam on Tuesday, amid rising operating costs for domestic carriers.
Deputy Secretary for Connectivity Coordination Rustam Efendi said the initiative is designed to trim airline operating expenses while bolstering the aviation sector. He emphasized the need for robust connectivity that links seaports, airports and industrial areas, and noted that the coordinating ministry will align cross‑sector policies to streamline goods flow and aviation logistics, including the National Logistics Ecosystem, port digitalisation and airport service optimisation.
Maintenance currently accounts for 16 to 20 percent of airline operating costs, according to Sokhib Al Rokhman, Director of Airworthiness and Aircraft Operations. He explained that the ministry is working to reduce these costs without compromising safety by easing restrictions on aircraft component imports and introducing a zero‑duty policy for selected parts. The goal is to keep ticket prices affordable amid global economic pressures.
Batam is poised to lead the expansion. Fary Djemy Francis, Deputy for Investment and Business at the Batam Authority, noted that Hang Nadim Airport hosts Batam Aero Technic, a special economic zone dedicated to aerospace maintenance. The project targets an investment of about Rp16 trillion (US$887.56 million) and has 100 hectares of land available for further MRO development. BP Batam has pledged to accelerate licensing and provide regulatory certainty to attract investors.
The MRO strategy fits into a broader effort to strengthen Indonesia’s aviation industry, which has seen rapid growth in passenger traffic and the proliferation of low‑cost carriers. By creating regional hubs, the government hopes to reduce dependence on foreign maintenance services, generate jobs and support the sector’s resilience.
Other related initiatives include Danantara Indonesia’s consideration of expanding into aircraft leasing, the government’s 2027 Hajj plans to address rising aviation fuel costs, and Minister AHY’s assurances of careful airfare adjustments amid Middle East tensions. These actions reflect a wider focus on stabilising aviation costs.
The MRO hubs will rely on integrated infrastructure that links seaports, airports and industrial zones to support the flow of parts and equipment. The ministry’s coordination of cross‑sector policies aims to create a seamless logistics network, while investment in Batam’s SEZ and proposed MRO facilities is expected to attract both domestic and foreign investors, potentially creating new employment opportunities and strengthening Indonesia’s position in the regional aviation market.
The government’s MRO initiative is currently in the planning and investment attraction phase. Upcoming developments will include detailed feasibility studies, licensing procedures and regulatory frameworks. The success of the hubs will depend on securing investment, streamlining logistics and maintaining safety standards. As the aviation sector continues to evolve, Indonesia’s focus on MRO infrastructure may shape the future of regional air transport.
Deputy Secretary for Connectivity Coordination Rustam Efendi said the initiative is designed to trim airline operating expenses while bolstering the aviation sector. He emphasized the need for robust connectivity that links seaports, airports and industrial areas, and noted that the coordinating ministry will align cross‑sector policies to streamline goods flow and aviation logistics, including the National Logistics Ecosystem, port digitalisation and airport service optimisation.
Maintenance currently accounts for 16 to 20 percent of airline operating costs, according to Sokhib Al Rokhman, Director of Airworthiness and Aircraft Operations. He explained that the ministry is working to reduce these costs without compromising safety by easing restrictions on aircraft component imports and introducing a zero‑duty policy for selected parts. The goal is to keep ticket prices affordable amid global economic pressures.
Batam is poised to lead the expansion. Fary Djemy Francis, Deputy for Investment and Business at the Batam Authority, noted that Hang Nadim Airport hosts Batam Aero Technic, a special economic zone dedicated to aerospace maintenance. The project targets an investment of about Rp16 trillion (US$887.56 million) and has 100 hectares of land available for further MRO development. BP Batam has pledged to accelerate licensing and provide regulatory certainty to attract investors.
The MRO strategy fits into a broader effort to strengthen Indonesia’s aviation industry, which has seen rapid growth in passenger traffic and the proliferation of low‑cost carriers. By creating regional hubs, the government hopes to reduce dependence on foreign maintenance services, generate jobs and support the sector’s resilience.
Other related initiatives include Danantara Indonesia’s consideration of expanding into aircraft leasing, the government’s 2027 Hajj plans to address rising aviation fuel costs, and Minister AHY’s assurances of careful airfare adjustments amid Middle East tensions. These actions reflect a wider focus on stabilising aviation costs.
The MRO hubs will rely on integrated infrastructure that links seaports, airports and industrial zones to support the flow of parts and equipment. The ministry’s coordination of cross‑sector policies aims to create a seamless logistics network, while investment in Batam’s SEZ and proposed MRO facilities is expected to attract both domestic and foreign investors, potentially creating new employment opportunities and strengthening Indonesia’s position in the regional aviation market.
The government’s MRO initiative is currently in the planning and investment attraction phase. Upcoming developments will include detailed feasibility studies, licensing procedures and regulatory frameworks. The success of the hubs will depend on securing investment, streamlining logistics and maintaining safety standards. As the aviation sector continues to evolve, Indonesia’s focus on MRO infrastructure may shape the future of regional air transport.
