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Lion Air, Indonesia’s largest carrier in terms of passenger volume, plans to take over managing the Armed Forces’ airports, now run by the state-owned enterprises PT Angkasa Pura I and II, a Lion Air spokesman said on Monday.

The takeover was authorized under the wide-ranging aviation reform law passed last year, which gave clearance for private companies to take over functions previously run by state-owned enterprises. The law, enacted in 2009, also enables Indonesia to expand its open skies policy, which removes government from commercial decisions on air routes, capacity and pricing. Under the terms of a 2004 law, all Armed Forces’ businesses are expected to be turned over to the government by October.

A national task force recommended last year that the military hand over control of 23 foundations, 55 firms and 1,098 cooperatives worth Rp 3.1 trillion ($300 million) for disposal, submitting their recommendations to Defense Minister Juwono Sudarsono last year.

“We formed a venture company with the Air Force to manage Halim Perdana Kusuma Airport in Jakarta last year,” said Edward Sirait, Lion’s spokesperson, confirming a report by Rusdi Kirana, the Lion Air president director, to Air Transport Intelligence News of Singapore.

“We’ve already got approval from the defense and finance ministries and we are awaiting approval from the Transportation Ministry.”

If the Transport Ministry approves the plan, Lion Air will be the first company to take over private foreign and domestic investment in the military’s airports. Rusdi told the publication that the new company would be 80 percent owned by Lion and 20 percent by the Air Force. Edward added this would be represented by the Air Force Cooperative.

Dudi Sudibyo, a senior aviation analyst with Angkasa Magazine, said the military would remain passive shareholders, with Lion providing operational capability.

Lion has also signed an agreement to develop and manage a section of Surabaya’s Juanda Airport which is now controlled by the Navy, with plans to develop a passenger terminal and aircraft maintenance hangar, Rusdi had told the Singapore magazine.

“In the long term it will make money. It also will bring other value-added to our services, where we can also provide our own style of service,” Edward said. 

Herry Bhakti, the director general of aviation in the Transportation Ministry, said a formal request from Lion Air for approval of its takeover plans had yet to be submitted to the ministry.