Despite Indonesia's booming economy and huge population size, challenges still abound for low-cost carriers in the country.
With multiple players in the market, competition is intense, says Citilink president and chief executive Arif Wibowo, citing Batavia Air's recent bankruptcy announcement as an example.
Mandala Airlines president director Paul Rombeek adds that it does not help that competition is also highly concentrated, with the top three players dominating 80% of the market share, making it tough for smaller players to compete. This is especially so when top player Lion Air can be "quite irrational in pricing".
He says that the country's infrastructure and capacity issues also pose challenges for carriers as fast growth on high density routes is often hampered by slot constraints. Those in the middle are especially squeezed as they are unable to fly the right routes and have to settle for less-than-optimal slots, adds Rombeek.
Wibowo meanwhile pointed out that it is also hard for carriers to stick to the pure low-cost model as "frills" such as free baggage remains a norm in Indonesia.
"The country's increasingly younger demographics and the fast growing population of first-time flyers also accelerates a unique market that has made the pure low-cost model uneasy to pursue," he adds.
Indonesia's geography also means that airlines require multiple hubs to operate effectively.
Citilink is embarking on an ambitious plan to increase its passenger numbers by more than five times within the next three years as it expands its fleet to 50 Airbus A320s and 30 ATR 72-600s turboprops.
Mandala, which emerged from bankruptcy last year, operates a fleet of seven A320s and plans to grow this to up to 25 aircraft by 2015. The carrier is 33% owned by Tiger Airways.
Indonesia's 240 million strong population and 17,000 islands make it an attractive market for airlines. Passenger traffic in the country grows by at least 5% annually, driven by demand from the 35 million people from the middle class.
Capacity in Indonesia, as measured by ASKs, has also doubled over the last five years - from 31.6 billion in 2007 to 65.8 billion in 2012, ICAO data shows. This means that there are now 489,430 domestic departures in Indonesia annually, up from 286,063 five years back.
Batavia was placed into bankruptcy and ceased operations on 30 January after lessor International Lease Finance took action against it in an Indonesian court over the debts it owed from the lease of two Airbus A330s. Last July, AirAsia and a partner had signed a conditional agreement to buy over Batavia but that was called off in October after both parties could not agree on a final price.