The Financial Feasibility on Developing Terminal Building of Sultan Mahmud Badaruddin II International Airport

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Passengers of Sultan Mahmud Badaruddin II (SMB II) International Airport have increased significantly. This can be seen by the increased flights in SMB II International Airport, as much as 10.15% a year either domestic or international. 2016 data show that 5% of the revenue of SMB II International Airport comes from airside services (parking, take-off, and landing), 6% from cargo, and 76% from terminal building services (Passenger Service Cost (PSC), and commercial area, and 12% from others (Angkasa Pura II, 2016). The objectives of the research are to forecast passenger growth at SMB II International Airport to analyze revenue and cost of development of the terminal building as well as the financial feasibility of the development. To predict passenger growth employs trend projection; however, methods used for analyzing financial feasibility include net present value (NPV), benefit-cost ratio (BCR), internal rate and return (IRR), payback period (PP), and sensitivity analysis. After conducting the analysis, it can be concluded that passengers will reach about 6.4 million in 2026. By considering revenue, expenses, and investment costs of the terminal building development, the value of NPV (Rp. 7,150,551,854.50), IRR (16.69%), BCR (1.003), and PP (7.13 years) is obtained. It can be concluded that the development of the terminal building is feasible.

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Oktari, M., Iqbal, M. M., and Agustien, M. 2019. The Financial Feasibility on Developing Terminal Building of Sultan Mahmud Badaruddin II International Airport. Journal of Physics: Conference Series, 1198(8). doi:10.1088/1742-6596/1198/8/082015

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