Indonesia Economy takes off with Jakarta
Although Indonesia has been hit hard by the global sell-off in emerging markets in recent weeks, no one has told passengers on the more than 40 daily flights from Jakarta to Singapore, which has become the world's fastest-growing major international air route.
The number of available seats jumped by 24 percent in the past year, according to the Center for Aviation, a market research company, after the Indonesia and Singapore governments raised a cap on flights between the two countries earlier this year.
Singapore tightens grip on airport crown)
With return seats a week by November, Jakarta-Singapore will be the second biggest international route after Hong Kong-Taiwan and ahead of Hong-Kong-Shanghai, Dubai-Doha and New York JFK-London Heathrow.
The rapid growth of air travel between Singapore and Jakarta highlights the resilience of the Indonesian economy but also its constraints, with many Indonesians travelling to their wealthy neighbor to get access to international standard healthcare, reliable onward travel connections and discreet wealth management
GM, Hertz, and Delta Airlines have outpaced the markets this year, Patrick Kaser, Brandywine Global, discusses if these top performers have more room to run.
Indonesia's economic growth has been driven by a fast-expanding middle class but investment in infrastructure, education and health has lagged behind, casting doubt on the sustainability of its development model. Bank Indonesia last week downgraded the country's gross domestic product forecast for percent, blaming slowing household spending and corporate investment.
"This is catch-up growth because the market was capped before," said Brendan Sobie, an analyst for the Center for Aviation in Singapore. "Indonesia is growing fast and Singapore is well positioned to tap this as a transit hub for Indonesians and an attractive destination for business and leisure."
With the cap on flights between Indonesia and Singapore lifted by percent, Mr Sobie expects the Jakarta-Singapore route soon to reach the new limit, growing by another percent in the next .
(Read more: Indonesia's rate hike best for the medium term)
Despite sometimes testy relations between the two neighbors, Indonesia is Singapore's biggest source of foreign visitors and tourism receipts, with million Indonesian visitors
Tens of thousands of wealthy Indonesians have properties and businesses in Singapore, which is home to at least 70 Indonesians with net assets of more than million, according to a report from UBS and the research company Wealth-X.
More from the Financial Times:
Singapore bank expands Indonesian links to Jakarta
Singapore's Lee vows shift in strategy
Indonesia worries as rupiah wobbles
Increased competition has driven down fares, with return tickets on low cost operators like Lion Air or AirAsia readily available for as little as That has opened up the market to millions of Indonesians who could never previously afford international air travel.
"It's more expensive for Jakartans to fly to Medan [Indonesia's fourth-biggest city] than Singapore," said Dharmadi, the chief executive of AirAsia's Indonesian airline. "Indonesians account for percent of the passengers travelling to and from Singapore."
(Read more: Airports use perks to compete for travelers)
With so many daily flights, many Indonesians find the 90-minute hop to Singapore's efficient Changi airport easier and quicker than driving through the traffic jams to Jakarta's ageing, overcapacity and badly-connected Sukarno-Hatta airport.
"Singapore is great, especially for women who are shopaholics," said Maria Yudi, a manager at a Jakarta-based paint company who travels to the city-state every three months. "From Lanvin handbags to H&M, you can find everything in one location and it's not far from one mall to another. Plus, the ambiance is really good, unlike in Jakarta where you cannot walk around."
Singapore tightens grip on airport crown
Gross Domestic Product Explained
Bank Indonesia rate hike the right move
New loyalty programs, from your airport
Autos & airlines on the move
Affordable Health Insurance
Retirement Calculator
Fixed Income Investments
When one travels internationally, one hears the voices of those we encounter along the way. Recently, it was overheard that a well-traveled person commented that "if you want to learn business, go to Singapore". She did not say the US or Europe. In fact, this lady was taking her son, who is a student at Babson University in MA, to Hong Kong, Singapore, and Macau to expose him to successful business practices. While the US remains the richest country in the world, for now, competition from emerging markets are making an impression upon future generations who will consider lucrative markets to make their fortune.
So, go ahead, publish the salaries of CEOs compared to employees. Shame the rich one percent. Let's see how far that gets us in the global world of commerce
Remaining characters
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CNBC welcomes your contribution. Please respect our community and the integrity of its participants. CNBC reserves the right to moderate and approve your comment.
F cheer as Fed stays pat
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No Fed taper brings back talk of currency war
The fastest growing air route in the world is...
SEC unveils rules on CEO pay ratio
Fed sticks to stimulus
Fed: No taper yet
Am I diversified? Cramer's call!
Cramer's stock picks:
Although Indonesia has been hit hard by the global sell-off in emerging markets in recent weeks, no one has told passengers on the more than 40 daily flights from Jakarta to Singapore, which has become the world's fastest-growing major international air route.
The number of available seats jumped by 24 percent in the past year, according to the Center for Aviation, a market research company, after the Indonesia and Singapore governments raised a cap on flights between the two countries earlier this year.
Singapore tightens grip on airport crown)
With return seats a week by November, Jakarta-Singapore will be the second biggest international route after Hong Kong-Taiwan and ahead of Hong-Kong-Shanghai, Dubai-Doha and New York JFK-London Heathrow.
The rapid growth of air travel between Singapore and Jakarta highlights the resilience of the Indonesian economy but also its constraints, with many Indonesians travelling to their wealthy neighbor to get access to international standard healthcare, reliable onward travel connections and discreet wealth management
GM, Hertz, and Delta Airlines have outpaced the markets this year, Patrick Kaser, Brandywine Global, discusses if these top performers have more room to run.
Indonesia's economic growth has been driven by a fast-expanding middle class but investment in infrastructure, education and health has lagged behind, casting doubt on the sustainability of its development model. Bank Indonesia last week downgraded the country's gross domestic product forecast for percent, blaming slowing household spending and corporate investment.
"This is catch-up growth because the market was capped before," said Brendan Sobie, an analyst for the Center for Aviation in Singapore. "Indonesia is growing fast and Singapore is well positioned to tap this as a transit hub for Indonesians and an attractive destination for business and leisure."
With the cap on flights between Indonesia and Singapore lifted by percent, Mr Sobie expects the Jakarta-Singapore route soon to reach the new limit, growing by another percent in the next .
(Read more: Indonesia's rate hike best for the medium term)
Despite sometimes testy relations between the two neighbors, Indonesia is Singapore's biggest source of foreign visitors and tourism receipts, with million Indonesian visitors
Tens of thousands of wealthy Indonesians have properties and businesses in Singapore, which is home to at least 70 Indonesians with net assets of more than million, according to a report from UBS and the research company Wealth-X.
More from the Financial Times:
Singapore bank expands Indonesian links to Jakarta
Singapore's Lee vows shift in strategy
Indonesia worries as rupiah wobbles
Increased competition has driven down fares, with return tickets on low cost operators like Lion Air or AirAsia readily available for as little as That has opened up the market to millions of Indonesians who could never previously afford international air travel.
"It's more expensive for Jakartans to fly to Medan [Indonesia's fourth-biggest city] than Singapore," said Dharmadi, the chief executive of AirAsia's Indonesian airline. "Indonesians account for percent of the passengers travelling to and from Singapore."
(Read more: Airports use perks to compete for travelers)
With so many daily flights, many Indonesians find the 90-minute hop to Singapore's efficient Changi airport easier and quicker than driving through the traffic jams to Jakarta's ageing, overcapacity and badly-connected Sukarno-Hatta airport.
"Singapore is great, especially for women who are shopaholics," said Maria Yudi, a manager at a Jakarta-based paint company who travels to the city-state every three months. "From Lanvin handbags to H&M, you can find everything in one location and it's not far from one mall to another. Plus, the ambiance is really good, unlike in Jakarta where you cannot walk around."
Singapore tightens grip on airport crown
Gross Domestic Product Explained
Bank Indonesia rate hike the right move
New loyalty programs, from your airport
Autos & airlines on the move
Affordable Health Insurance
Retirement Calculator
Fixed Income Investments
When one travels internationally, one hears the voices of those we encounter along the way. Recently, it was overheard that a well-traveled person commented that "if you want to learn business, go to Singapore". She did not say the US or Europe. In fact, this lady was taking her son, who is a student at Babson University in MA, to Hong Kong, Singapore, and Macau to expose him to successful business practices. While the US remains the richest country in the world, for now, competition from emerging markets are making an impression upon future generations who will consider lucrative markets to make their fortune.
So, go ahead, publish the salaries of CEOs compared to employees. Shame the rich one percent. Let's see how far that gets us in the global world of commerce
Remaining characters
Preview Comment
CNBC welcomes your contribution. Please respect our community and the integrity of its participants. CNBC reserves the right to moderate and approve your comment.
F cheer as Fed stays pat
New iPhones should move the needle, says Crame
pop? Moët to auction 1914 Champagne
No Fed taper brings back talk of currency war
The fastest growing air route in the world is...
SEC unveils rules on CEO pay ratio
Fed sticks to stimulus
Fed: No taper yet
Am I diversified? Cramer's call!
Cramer's stock picks:
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