Service on the Fly
    Category: Private Money By : Jeffrey Hutton Read : 1847 Date : Wednesday, June 12, 2013 - 09:49:04


    Ahmad Zamroni / Forbes Indonesia

    Indonesia's monthly domestic air passenger traffic is growing at 16% a year—more than double the annual rate of the country's overall growth. The number of those flying overseas is also climbing, on average 8% a year. Jakarta's main international airport Soekarno-Hatta, is one of the ten busiest airports in the world, handling close to 60 million passengers a year, roughly double the passengers it handled in 2008.

    One company is profiting mightly from this growth: PT Cardig Aero Services (CAS), which offers ground services including check-in, gate maintenance, and warehousing to many of the airlines at Soerkarno-Hatta and over 20 other major airports—as well as having a cargo and ground handling joint venture with Singapore Airport Terminal Services. It also has engineering services, in a joint venture with Singapore's SIA Engineering. Its joint ventures with Singapore companies means it has some highly professional partners.

    CAS is also a prime example of the benefits of private equity investments in the country. One of CAS's two main shareholders is Baring Private Equity Asia. “CAS gives us exposure to the airline industry and to the country's GDP,” says Rachmat Kaimuddin, vice principal of Baring Private Equity Asia, which has had a 42% stake in CAS since it sold shares in a 2011 IPO. Baring Private Equity Asia's stake in CAS is its first investment in an Indonesian company since it was spun out of its parent, ING Baring in Hong Kong in a management buyout in 2000. Baring also placed a commissioner on the board. Another 44% of CAS is owned by PT Cardig Asset Management, a holding company for the family of CAS Chief Executive Diono Nurjadin, who started the company in 1984 when Soekarno-Hatta opened. 

    In the domestic market, Garuda Indonesia and local low-cost carriers tend to have their own inhouse firms, but for all international carriers, CAS is the default service provider. As such, the company will expand along with the overall growth of the sector.

    One of its most interesting services is catering, providing inflight meals that are served aboard airlines as they come through Indonesian airports. It is now providing about 8,000 meals a day for air passengers, and operates at full capacity. But an even bigger number of meals, 21,000, are being prepared by CAS and served at mining sites. CAS is also looking now at expanding its catering operations into industrial estates, to feed all the employees working in them. The company is developing a kitchen in Karawang that will have the capacity to prepare 15,000 meals a day. Two more similar kitchens for industrial estate clients are in the works. As an OSK securities report on the company is headlined: “Growth powered by empty stomachs.”



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