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AP II Chooses Asset Utilization Strategy to Accelerate Business Recovery Amid the COVID-19 Pandemic

03 Mar 2022

Jakarta – PT Angkasa Pura II, the manager of 20 airports in Indonesia, has chosen the Asset Recycling strategy or the use of old assets to generate new assets to increase revenue and accelerate business recovery amid the COVID-19 pandemic.

AP II President Director Muhammad Awaluddin said the Asset Recycling strategy was carried out through three programs.

"AP II utilizes assets through three programs, namely the Asset Optimization program (brown field assets), the Asset Acceleration program (assets under construction) and the Asset Utilization program (green field assets) as a strategy to accelerate business recovery in the midst of a pandemic."

“The Asset Optimization Program is to make existing assets that already generate income have added value to increase revenue. Meanwhile, Asset Acceleration to create assets under construction has been prepared to generate income before construction is 100% complete. Then, Asset Utilization is an existing idle asset that will be developed to gain new income," said Muhammad Awaluddin.

This was conveyed by Muhammad Awaluddin when he was a panelist in a webinar held by the Air Law Society (MHU) on Wednesday, March 2, 2022. In the webinar, the panelists of the Director General of Civil Aviation of the Ministry of Transportation Novie Riyanto, Director of Compliance, Assets and Procurement of PT Angkasa Pura I, and Secretary General of MHU Anggia Rukmasari.

Muhammad Awaluddin said asset utilization could be done organically and inorganically.

“Organic asset utilization involves 5 subsidiaries, namely PT Angkasa Pura Solusi, PT Angkasa Kargo, PT Angkasa Pura Propertindo, PT Angkasa Pura Aviasi, and PT Gapura Angkasa, as well as affiliated companies. Meanwhile, the use of inorganic assets is carried out through business partnerships and strategic partnerships with external parties (corporate action)," explained Muhammad Awaluddin.

Furthermore, the business partnership and strategic partnership carried out by AP II as the airport manager must bring in 3E, namely Expansion the traffic (bringing flight traffic), then Expertise sharing (the transfer of knowledge) and Equity partnership (fulfillment of funding needs).

Meanwhile, the benefits derived from strategic partnerships include dividend cash, upfront payments, revenue sharing, and the development of new assets with a BOT pattern.

"Cooperation with external parties can make AP II reduce working capital and investment capital in airport operations and development, as well as increase revenue," said Muhammad Awaluddin.

Meanwhile, AP II has collaborated with the GMR Airport Consortium in conducting a strategic partnership for the management and development of Kualanamu Airport in Deli Serdang, North Sumatra.

The next plan is a strategic partnership between AP II and the Investment Management Institute (LPI) or also known as the Indonesia Investment Authority (INA) as a sovereign wealth fund from Indonesia. The strategic partnership between AP II and INA is planned to be carried out at Soekarno-Hatta Airport and also in the Cargo Village area of ​​Soekarno-Hatta Airport.

In the webinar, the Director General of Civil Aviation at the Ministry of Transportation Novie Riyanto also said that cooperation in the airport sector has been supported by various regulations, including the Minister of Transportation Regulation Number 81 of 2021 concerning Business Activities at Airports.

The Director General of Civil Aviation said that one of the points in PM 81/2021 is that Airport Cooperation can be carried out between the Government and Business Entities in the form of KSP (Utilization Cooperation), PPP (Government and Business Entity Cooperation), HPT (Limited Management Rights). or BUMN/BUMD with a Business Entity in the form as regulated in the BUMN/BUMD Regulation.

Secretary General of MHU Anggia Rukmasari said the development of the national airport will continue to be carried out in the coming years, supported by the stipulation of the 2020-2024 Air Transport Infrastructure Development Policy Direction.

"This includes airport support in isolated, border and disaster-prone areas, airport support in strategic areas, SEZs and KI, then Eco-Airport implementation, Smart Airport implementation and super hub airport development," said the Secretary General of MHU.