Case Study 1: Turnaround of Kualanamu Airport (Indonesia’s first Privatized airport)

The Challenge

By late 2024, Kualanamu International Airport (KNO) faced significant headwinds threatening its recovery and long-term viability:

Severe capacity constraints: Domestic fleet availability remained 30% below pre-COVID levels, with airlines struggling due to high fuel prices and maintenance backlogs.
High operational costs: Fuel prices at Medan were 13% higher than in Jakarta, driven by Pertamina’s pricing monopoly.
Regulatory barriers: Strict fare caps, outdated bilateral agreements, and limited aircraft supply restricted both domestic and international capacity growth.
Weak commercial performance: The airport’s commercial areas were underperforming, with outdated rent-based contracts and low passenger spend rates.
Financial stress: The airport’s revenue and EBITDA were trailing its long-term business plan (LTBP) projections, requiring urgent interventions to stabilize cash flows.

Developed a comprehensive recovery strategy to address both the post-COVID slowdown and the election-year impact on domestic traffic.
Finalized a phased ASR funding model (IDR 3.2T), aligned with long-term profitability and phased equity infusion.
Negotiated tariff revisions for aero charges to improve financial sustainability (+10–15% uplift in FY25).

Successfully launched new domestic and international routes including Surabaya, Abu Dhabi, Bangkok, Hyderabad, and Chennai.
Positioned Medan as Sumatra’s Umrah hub, achieving >40% market share for Umrah traffic from the island.
Projected domestic traffic rebound to 6.1M pax in 2025 with targeted international growth driven by partnerships with Saudia, IndiGo, and Thai Airways.

Rolled out a new commercial master plan post-ICA feasibility:
- Added 30+ new brands including Starbucks, Subway, Beard Papa, Duty-Free, and WHSmith.
- Redesigned the terminal layout with a central retail hub and F&B zones aligned with passenger flow.
Transitioned all key contracts to revenue-sharing models leading to a 23% YoY increase in non-aero revenue per pax in 2024.
Partnered with Celebi for cargo terminal modernization and multi-fold revenue growth (3.5x targeted by Year 5).

Retendered ~50% of existing contracts, delivering ₹3.7 Cr annual cost savings.
Upgraded core passenger facilities including toilets, HVAC, security screening, and gate areas.
Controlled Opex at ₹121 Cr (vs planned ₹145 Cr) despite inflationary pressures and infrastructure upgrades.
Initiated process automation and digital roadmap including e-gates, AOCC system, CRM for cargo, and RFID-enabled parking.

Projected aero tariff revisions to add ₹40–50 Cr incremental revenue in FY25.
Greenlit Phase 1 Capex in 2025 to prepare for a 10 million pax capacity.
EBITDA projected to grow from ₹159 Cr in 2025 to ₹729 Cr by 2029, achieving significant financial turnaround.

Strategic Positioning: Reestablished Kualanamu as Western Indonesia’s primary international gateway and Umrah hub.
Commercial Revamp: Set a new standard for non-aero revenue management in Indonesian airports.
Financial Resilience: Created a sustainable financial model through phased investment, tariff restructuring, and diversified revenue streams.
Operational Excellence: Delivered significant cost savings and improved passenger experience through facility upgrades and digital enablement.

Appreciation from leadership of Angkasa Pura Aviasi

Project Gallery:

Early Results & Outlook

Traffic: 91% of pre-COVID levels recovered in 2024; international up 20% YoY
Retail: Store performance improved with smarter layouts and tenant mix
Infrastructure: Phase 1 execution begins 2025 to support growth and enhance experience