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The Way of PT Angkasa Pura II Maintain Business & Protect 19 Airport Operations in the Middle of COVID-19

13 Jun 2020

Jakarta - Travel by people on planes is significantly reduced in the global pandemic COVID-19, which has an impact on the aviation industry.

However, air connectivity still needs to be maintained to accelerate the handling of COVID-19.

In line with that, PT Angkasa Pura II (Persero) still operates 19 airports to serve flights.

PT Angkasa Pura II President Director Muhammad Awaluddin said the company was pressing operational costs, cutting capital expenditure (capex) and tightening cash flow management.

The three programs are part of efforts to maintain business continuity which has been carried out since March 2020 or when a pandemic is established, so that Indonesia's air connectivity is maintained.

"The focus in business survival is to strictly calculate spending through the Cost Leadership program; then trim capex; and tightening cash flow management, "said Muhammad Awaluddin.

Capex Disbursement
In early 2020 PT Angkasa Pura II set a capex of IDR7.8 trillion, but in line with the pandemic, capex was cut to IDR1.4 trillion, and then further tightened to IDR1.1 trillion.

This year's Capex is specifically used for multi-year projects, maintenance of facilities to ensure security, safety, service, and design of Terminal 4 of Soekarno-Hatta International Airport.

"This year is not a year of expansion for PT Angkasa Pura II because we take into account everything in the middle of this pandemic," Muhammad Awaluddin said.

Cost Leadership
PT Angkasa Pura II also tightened belts by making savings from operational side at 19 airports. Savings such as reducing the cost of non-priority facilities and services pay attention to conditions that exist where aircraft passenger traffic is also reduced.
One example of the savings made at Soekarno-Hatta is to temporarily close Terminal 1 and Terminal 2F, where this is also an effort to set operational patterns to support the PSBB. In line with the PSBB, the Skytrain operation which is a mode of inter-terminal electric train transportation has been temporarily stopped.

"Through cost leadership, savings from the operational side at 19 airports are quite large, savings can be made up to 70% of the estimated cost we estimated at the beginning of the year. As a group including subsidiaries, savings can be made up to 60%. Nominal savings are quite large, "said Muhammad Awaluddin.

Cash flow management
The Company puts forward the principle of prudence in managing cash flow. In the midst of this pandemic, cash inflows have indeed been under pressure due to decreased passenger traffic, but they are still supported by maintaining the cargo transportation business. In addition, a number of banks including those in Himbara have also provided loan facilities to PT Angkasa Pura II.
The cash out flow (cash out flow) seeks to be managed properly, some of which is done through cost leadership.

"We are trying to balance cash inflows and cash outflows in the middle of this pandemic. Until now, PT Angkasa Pura II has been able to maintain this, so that later it will be able to expand again when the pandemic is under control, "said Muhammad Awaluddin.

Through Cost Leadership, Capex Disbursement, and Cash Flow Management, in the midst of this pandemic PT Angkasa Pura II can maintain the operations of 19 airports.

The company's airport has readiness to operate amid a pandemic with various facilities and equipment; follow the dynamics of procedures or regulations that adjust to the latest developments; and operate more lean and optimal.

One of the company's airports, Soekarno-Hatta International Airport, continues to operate 24 hours a day to support the handling of COVID-19.

Soekarno-Hatta became the starting point for the flow of air transportation logistics assistance to help Indonesia deal with COVID-19.

In addition, Soekarno-Hatta was also the main airport serving repatriation flights to take Indonesian citizens home.

"PT Angkasa Pura II strives to always support the handling of COVID-19 with our capabilities and resources and in collaboration with the Ministry of Health's Port Health Office, the Task Force for the Acceleration of Handling COVID-19 and other stakeholders," said Muhammad Awaluddin.

In the midst of a pandemic, PT Angkasa Pura II still presents service innovations such as various touchless facilities in Soekarno-Hatta.