Business Licensing Framework in the Indonesian Airport Sector

By Dhonke Kafi and Izaldi Fikri Muhammad.

A      Background

In Indonesia, most type of businesses in various sectors needs to have a form of licensing in order to operate legally, these licensing are put in place in order the achieve a sound and structured framework for businesses in Indonesia, while also keeping the market in check. Of course, businesses in the airport sector are not an exception to this, as they too are under the business licensing framework in Indonesia. This essay is made to analyze and discuss the business licensing framework in the airport sector of Indonesia, which the writer hope in turn would help the readers in understanding the topic of this essay.

B      Legal Basis


Laws / Regulations



Law Number 1 of 2009 regarding Flight

Law 1/2009


Government Regulation Number 5 of 2021 regarding Implementation of Risk-Based Business Licenses

GR 5/2021


Government Regulation Number 32 of 2021 regarding Implementation of the Aviation Sector

GR 32/2021


Minister of Transportation Regulation Number 81 of 2021 regarding Business Activities at The Airport

MoT 81/2021


C      Business Licensing in the Airport Sector

An airport is an area on land and/or waters with certain boundaries that is used as a place for aircraft to land and take off, boarding passengers, loading and unloading goods, and places for intra and intermodal transportation, which are equipped with aviation safety and security facilities, as well as basic facilities and other supporting facilities.[1] There are two types of airport based on Law 1/2009, which are general airports and special airports.[2] A general airport is an airport that is used to serve public interest, while a special airport is one that is used to serve its own interests to support its main business activities.[3]

An airport functions as a place for the implementation of government and/or business activities.[4] The usage of airports consists of international airports and domestic airports.[5]

C1   Law No. 1/2009

This law is the root for all things regulation relating to flight, so in this essay with the topic of airport business licensing, we must refer to this law. According to this law, the permit to construct an airport in Indonesia will be stipulated by the Government after coordination with the Regional Government.[6] The permit will be published after these requirements are met:[7]

  1. proof of land ownership and/or tenure;
  2. recommendations given by the relevant agencies on utilities and accessibility in airport operations;
  3. proof of airport location determination;
  4. detailed engineering design of airport basic facilities; and
  5. environmental sustainability.

What’s mentioned above is only in regard to constructing the airport, there is still the matter of operating it. All airports that are in operation must comply with the provisions of aviation safety and security, as well as the provisions of airport services. For airports that have met the requirements of aviation safety and security, the MoT will provide them:[8]

  1. airport certificate, for airports serving aircraft with a capacity of more than 30 (thirty) seats or with a maximum take-off weight of more than 5,700 (five thousand seven hundred) kilograms; or
  2. airport register, for airports serving aircraft with a maximum capacity of 30 (thirty) seats or with a maximum take-off weight of up to 5,700 (five thousand seven hundred) kilograms.

Those who operates an airport but fails to meet the provisions of airport services as mentioned above, will be subject to administrative sanctions in the form of:

  1. warning;
  2. reduction in airport service rates; and/or
  3. certificate revocation

C2   GR 32/2021

Utilization of the area of interest of the airport must ensure Aviation Safety and Security, in accordance with the Aviation Operations Safety Area and the boundary of the noise area. Airport operations must comply with the provisions of Aviation Safety, Aviation Security, and Airport services. Airports that have met the provision mentioned above will be given an Airport Certificate or Airport Register,[9] this is also mentioned in Law 1/2009 that is mentioned in the sub-chapter above. In this GR, it is not specified the difference between Airport Certificate and Register, however in Law 1/2009 it is stated clearly that based on the airport capacity or take-off weight that determines if the airport is given a certificate or register.

In this regulation, it is also mentioned that an Airport Business Entity can provide airport services after fulfilling the Airport Business Entity Business License. The Business License mentioned before is given by the MoT after the Airport Business Entity has fulfilled all the standards stipulated by the MoT. The MoT will be the one to verify the fulfillment of said standards.[10]

C3   GR 5/2021

The establishment of this GR aims to improve the investment ecosystem and business activities, through:

  1. implementation of the issuance of Business Licensing more effectively and simply; and
  2. Transparent, structured, and accountable supervision of business activities in accordance with the provisions of the legislation.

Based on this regulation, to start and carry out business activities in Indonesia, they must fulfill basic requirements for Business Licensing and/or Risk-Based Business Licensing.[11] This also applies to business in the airport sector that is the topic of this essay.

The Central Government has established policies for the implementation of Risk-Based Business Licensing. The transportation sector is one of the sectors that is the target of the implementation of Risk-Based Business Licensing, hence we must also refer to this GR in regard to business licensing in the airport sector, as the airport is a part of the transportation sector.

For airport activities, the KBLI number is 55231, which has the scope of activity of airport services. According to the KBLI, airport services have a medium high risk level, and to acquire the Business License a Business Registration Number (“NIB”) and Standard Certificate (which are the certificates mentioned in the sub-chapters above) is needed. The time needed to make the license is 5 days, and it is valid as for as long as the airport services are still up and running. The authority is held by the MoT.[12]

C4   MoT 81/2021

Based on this regulation, business activities for airports are split into two, which are:

  1. airport services; and
  2. airport related services.

Airport services as referred to above in the letter a includes Aircraft, passenger, goods and postal services which consist of providing and/or developing:[13]

  1. facilities for aircraft landing, takeoff, maneuvering, parking, and storage service activities;
  2. terminal facilities for passenger, cargo and postal transportation services;
  3. electronics, electricity, water, and waste disposal facilities; and
  4. land for buildings, fields and industries as well as buildings or buildings related to the smooth operation of air transportation.

The airport services mentioned above is going be operated on, and those who are allowed by the regulation to do such said operation are:[14]

  1. Airport Business Entity for commercially operated airports after fulfilling the Business Licensing; or
  2. Airport Operator Unit for Airports that have not been commercially operated, established by and responsible to the Central Government and/or Regional Governments in accordance with their authority.

The Airport Business Entity mentioned above can be carried out by BUMN/D or an Indonesian Legal Entity.[15] The BUMN/D referred above is those especially established to provide airport services, in accordance with the provisions of the legislation, which is done through:[16]

  1. State/Regional Equity Participation; or
  2. Cooperation in Utilization of BMN / D.

Meanwhile, for the Indonesian Legal Entity, they must go through a selection process in order to operate a commercial airport, the selection process mentioned above are:[17]

  1. cooperation between the Central Government and business entities; or
  2. cooperation between BUMN or BUMD with business entities.

The Indonesian Legal Entity that wins the selection process is determined as the provider of Airport services at an airport that is commercially managed as stated in the Concession agreement and/or other forms of cooperation.

Airport Services

After the abovementioned process, an airport service provider will be designated. For the BUMN/D or Indonesian Legal Entity that has been chosen as the airport service provider, they are required to have an airport business license in the form of an Airport Business Entity Standard Certificate (“ABESC”). The Airport Business Entity Standard Certificate is acquired through the Online Single Submission system (‘’OSS’’).[18] To acquire the abovementioned certificate, the BUMN/D or Legal Entity must meet these requirements:[19]

  1. has been chosen as a service provider to the airport at an airport that is operated commercially;
  2. the company’s financial capability to build, develop, and operate an airport as evidenced by the financial statements of the said Indonesian Legal Entity and/or the shareholders of the said Indonesian Legal Entity, which have been audited by a public accounting firm;
  3. composition of capital ownership in accordance with the provisions of laws and regulations in the field of investment;
  4. the amount of the company’s authorized capital is at least 30% (thirty percent) of the capital expenditure during the Concession period, plus the amount of operational costs for 12 (twelve) months as outlined in the business plan;
  5. the amount of paid-up capital in accordance with the provisions of the legislation in the field of limited liability companies;
  6. airport operation organization and personnel in accordance with civil aviation safety and security standards, as well as airport service standards; and
  7. prepare a business plan for a period of time that is adjusted to the airport master plan, at least containing:
    1. company profile, which includes company background, vision, mission, strategies and business patterns that have been carried out;
    2. services to be provided;
    3. market analysis including market targets, growth and trends;
    4. airport management organization based on service level; and
    5. financial plan including the amount of capital and sources of capital; and risk analysis.

After the BUMN/D or Indonesian Legal Entity has provided the abovementioned requirements, its completeness and validation will then be verified by the Director General, and only then, when everything has been verified, the ABESC will be given. The ABESC stays valid as long as the Airport Business Entity is still carrying out airport service activities as intended, and the ABESC cannot be transferred.

In this regulation, there is another certificate that is needed in order to operate an airport, which is also mentioned in the sub-chapters above, which is the Airport Certificate/Register.

Airport Related Services

Airport related services are provided by an Indonesian Legal Entity that has a business license for technical services for handling aircraft on the ground (ground handling), passenger service and baggage and cargo handling and post. The business license as referred to above is in the form of a Business Identification Number (NIB) and a certificate of standard technical service for handling aircraft on the ground (ground handling), passenger and the baggage services, and cargo and postal handling.[20]

The application for a business license is carried out through the Online Single Submission (OSS) system. The standard certificate of technical service for handling aircraft on the ground (ground handling) for passenger and baggage services as well as cargo and postal handling is valid as long as the Indonesian Legal Entity carries out airport-related service activities.[21]

D     Conclusion

Based on what we have discussed in the chapter before, we can see that in order to build and operate airports in Indonesia, what we need in regard to the business licensing are:

  1. Airport Certificate / Register.
  2. Airport Business Entity Standard Certificate.
  3. Standard certificate of technical service for handling aircraft on the ground (ground handling), passenger and baggage services and cargo and postal handling. (For airport related services).

Airport Certificate / Register has been mentioned multiple times, from Law 1/2009 to MoT 81/2021. However, when we refer to Law 1/2009 and GR 32/2021, we can see that in regard to the licensing they are still pretty general. In GR 32/2021, they mentioned Airport Business Entity Licensing, but it is then further developed in MoT 82/2021 that what is meant by Airport Business Entity Licensing is by having an Airport Business Entity Standard Certificate which will be given by the MoT.

In MoT 81/2021, it is also stipulated that in regard to all the certificate mentioned above, it will be done through the OSS system.




[1] Article 1 number 33, Law 1/2009.

[2] Article 192, Law 1/2009.

[3] Article 1 number 34 and 35, Law 1/2009.

[4] Article 195, Law 1/2009.

[5] Article 196, Law 1/2009.

[6] Article 215 (1), Law 1/2009.

[7] Article 215 (2), Law 1/2009.

[8] Article 217 (2), Law 1/2009.

[9] Article 79 (1) and (2), GR 32/2021.

[10] Article 94 (1) and (2), GR 32/2021.

[11] Article 4, GR 5/2021.

[12] Appendix I Transportation Sector Number 87, GR 5/2021.

[13] Article 3 (1), MoT 81/2021.

[14] Article 4, MoT 81/2021.

[15] Article 5, MoT 81/2021.

[16] Article 6 (2), MoT 81/2021.

[17] Article 7 (1), MoT 81/2021.

[18] Article 26 (1) and (2), MoT 81/2021.

[19] Article 26 (3), MoT 81/2021.

[20] Article 40 (1) and (2), MoT 81/2021.

[21] Article 40 (5), MoT 81/2021.