It’s unclear who will replace Yudhoyono. The best-known declared contenders are throwbacks to the Suharto era: Bakrie, the Bumi protagonist and chairman of the Golkar Party, which was founded by Suharto, and Prabowo Subianto, commander of the armed forces under Suharto.
“It’s still wide open,” Castle says.
While the economy is not growing as fast as it was two years ago, Indonesian airlines carried 70 million passengers in 2012, up from 37 million in 2008, according to the Sydney-based Capa Center for Aviation.
The boom has come at a price. Most Indonesian airports are operating way beyond capacity. Last year, Jakarta’s 28-year-old facility handled 58 million passengers, twice the number it was built to serve.
And a grim safety record taints Indonesia’s increasingly crowded skies. In 2010, a particularly bad year, the country accounted for 1.4 percent of all plane flights and 4 percent of all air accidents.
In 2007, after three fatal crashes of flights operated by Indonesian carriers killed 272 people in two years, the European Union banned budget operator PT Lion Mentari Airlines, state-owned PT Garuda Indonesia and several smaller Indonesian airlines from Europe’s airspace on safety grounds.
In 2009, the E.U. lifted the ban on Garuda and three other carriers; Lion is still barred. In April, a Lion Boeing 737-800 crash-landed in the Bali Sea. All 108 passengers and crew members survived, though the plane was a write-off. Lion declined to comment in detail.
“We do not know yet what exactly happened,” says Edward Sirait, commercial director of Lion Air.
AirAsia, which started flying in 1996, has had no fatal accidents.
Through it all, says Brendan Sobie, Capa’s Singapore-based chief analyst, “Indonesia has been the sleeping giant of aviation.”
Its awakening is good news for airlines such as AirAsia, whose shares on the Kuala Lumpur exchange more than doubled during the five years ending June 12, and a bonanza for the world’s two biggest planemakers, Chicago-based Boeing and its European rival, Airbus.
Since June 2011, AirAsia, which has a 40 percent share of Indonesia’s international market, and Lion, which has a 45 percent share of the domestic market, have become Boeing and Airbus’s biggest customers.
They placed orders so huge that President Obama, British Prime Minister David Cameron and French President Francois Hollande have all turned out, wreathed in smiles, to preside over the various contract-signing ceremonies.
In total, Lion and AirAsia have ordered 664 planes worth $64.4 billion at list prices. Closely held Lion has ordered 232 planes from Boeing and the same number from Airbus.
Like air-travel growth in the region, Fernandes’s belief in the Indonesian economy shows no sign of abating. At the Paris Air Show last summer, AirAsia ordered 200 Airbus A320neos. Fernandes says he’ll fund part of the $18 billion purchase by selling an unspecified number of shares in AirAsia’s Indonesian unit later this year.
“I’m putting my money where my mouth is,” he says.
The full version of this Bloomberg Markets article appears in the magazine’s July issue.