Proposed Strategy to Explore Revenue StreamDiversification at AirNav Indonesia

The impact of a crisis such as the COVID-19 pandemic has had a major impact on the world of aviation and air navigation service providers, including AirNav. Mitigation measures need to be taken to reduce the risk of similar crises in the future. Revenue diversification is proposed as an effort to mitigate this. The proposed diversification strategy is explored using PESTLE, Resource-Base View, and SWOT to analyze AirNav’s current condition while TOWS and Ansoff are used to design the proposed strategy. BMC is used to visualize the proposed new business model in diversification. This study identifies UAV services, digital solutions, infrastructure services, consulting, and training services as potential new revenue streams. The results can be used for AirNav’s transformation to prepare for diversification to achieve resilience and competitiveness in the dynamic aviation industry.

Introduction

AirNav Indonesia is the sole Air Navigation Service Provider (ANSP) responsible for managing air traffic across the extensive airspace of Indonesia. Since its establishment in 2012, AirNav has been pivotal in ensuring the safety, efficiency, and reliability of air navigation services in one of the world’s most complex airspaces (Airnav Indonesia, 2024). Operating as a state-owned enterprise, its revenue model heavily relies on service charges derived from domestic flights, international routes, and overflights. While this singular revenue source has historically supported its operations, it poses a significant vulnerability during periods of external disruption.

The COVID-19 pandemic starkly highlighted this vulnerability. Global travel restrictions and a drastic reduction in air traffic led to a sharp decline in AirNav’s revenue, exposing its financial fragility. Between 2019 and 2020, the organization experienced a dramatic revenue drop of over 55%, forcing it to adopt cost-cutting measures and defer strategic investments (PERUM LPPNPI, 2023a). This crisis emphasized the critical need for AirNav to diversify its revenue streams to ensure financial resilience and operational sustainability in an unpredictable environment.

As the aviation industry continues to recover and adapt to new challenges, diversification has become a strategic imperative for AirNav. By leveraging its strengths, such as regulatory monopoly, advanced technological infrastructure, and a skilled workforce, the organization can explore innovative revenue streams. Emerging opportunities in unmanned aerial vehicle (UAV) traffic management, digital transformation, consultancy services, and aviation training provide promising avenues for growth.

This study aims to explore these diversification strategies through a comprehensive evaluation of internal and external factors. Using established strategic frameworks, PESTLE, RBV, SWOT, TOWS, and Ansoff’s Matrix, the research identifies actionable strategies to reduce AirNav’s reliance on traditional income sources. These strategies are operationalized using the Business Model Canvas (BMC), offering a structured roadmap for implementation. Ultimately, the findings aim to support AirNav in transitioning to a robust and diversified business model capable of sustaining its leadership position in the aviation industry. The following sections of this paper delve into the theoretical foundations, methodology, results, and recommendations, providing a structured pathway for AirNav to enhance its resilience and seize emerging opportunities. By doing so, the organization can secure its financial stability and continue contributing to the growth of Indonesia’s aviation sector.

Literature Review

Background

Early 2020, the World Health Organization (WHO) announced the COVID-19 as a pandemic. To prevent the disease spread widely across the world, government in many countries around the world implemented travel restrictions and lockdown. This situation hit several industry sector and the aviation industry harder impacted. the travel restrictions caused about a 60% or 2.7 billion reduction in the total number of flight passengers globally in 2020, a 49% or 2.2 billion reduction in 2021, and a 29% or 1.2 billion reduction in 2022 compared with 4.5 billion passengers in 2019. The decline due to the COVID-19 pandemic is the worst crisis to impact the aviation industry sector than other crises like SARS, 911 attacks, and the financial crisis (International Civil Aviation Organization (ICAO), 2023).

Travel restrictions’ domino effect keeps airlines, airports, and air navigation system providers with lower income. Airlines lost operation income of roughly USD 372 billion in 2020; next year it lost USD 324 billion; in 2022 it lost USD 175 billion. Similarly, airports also suffered significant revenue declines, with estimated losses ranging between USD 90 billion to USD 110 billion in 2020 alone and Air navigation service providers revenue loss approximately USD 10 billion to USD 12 billion during the same period, as the reduced number of flights (International Civil Aviation Organization (ICAO), 2023).

The substantial revenue losses and operational challenges experienced across all regions, particularly in Asia Pacific and Indonesia, underscore the need for resilient strategies and innovative approaches to ensure the industry’s recovery and sustainability in a post-pandemic world.

Theoretical Foundations

Diversification is a strategy that companies use to grow and stabilize their finances by spreading out into new markets or introducing new products. Companies try to reduce their reliance on a single source of income and decrease their risks. Diversification occurs when companies have limited room for growth in their current markets or want to avoid becoming overly reliant on a single product or service (Ansoff, 1965). It’s about using what the organization already has, its skills, resources, and expertise, to explore new possibilities, whether those are closely related to its core operations or entirely different.

Corporate diversification means branching out into new products or services. Besides offering significant benefits, diversification also presents challenges. The success depends on aligning the strategy with the organization’s goals, leveraging available resources effectively, and managing the complexities of operating in different markets (Rothaermel, 2024). During the COVID-19 pandemic, AirNav’s revenue model was vulnerable, because it relies on one source of income only. By using diversification, AirNav can explore another potential revenue source that aligns with AirNav’s strengths and abilities.

This research uses strategic management frameworks (PESTLE, the Resource-Based View, SWOT, TOWS, Ansoff’s Matrix, and the Business Model Canvas) to deeply analyze the potential diversification in AirNav. Current condition analysis is the way to understand the position of AirNav at the moment. This research uses three methodologies to evaluate the current condition: Resource-Based View (RBV) theory, PESTLE analysis, and SWOT analysis. The research utilizes TOWS and Ansoff’s Matrix to develop effective strategies to address the problems, based on the results of earlier tools. The Business Model Canvas (BMC) is a practical framework that provides a visual and structured approach to describe, design, analyze, and innovate business models.

Strategic Frameworks for Analysis

To develop effective diversification strategies, this study employs several established strategic management frameworks:

• PESTLE Analysis: This framework examines external political, economic, social, technological, legal, and environmental factors that impact AirNav’s operations and diversification potential. For instance, technological advancements in UAVs and digital platforms present significant opportunities, while geopolitical tensions and regulatory constraints pose challenges.

• Resource-Based View (RBV): RBV focuses on internal strengths and capabilities, identifying resources that are valuable, rare, inimitable, and organized (VRIO). AirNav’s advanced navigation systems, regulatory monopoly, and long-standing stakeholder relationships are key assets that can drive diversification.

• SWOT Analysis: SWOT provides a comprehensive assessment of AirNav’s internal strengths and weaknesses, as well as external opportunities and threats. This analysis is critical for identifying areas where the organization can leverage its strengths to address weaknesses and mitigate external risks.

• TOWS Matrix: Building on the SWOT framework, the TOWS matrix aligns internal and external factors to develop actionable strategies. This approach ensures that AirNav’s diversification efforts are both feasible and impactful.

• Ansoff’s Matrix: Ansoff’s framework helps identify specific growth pathways, such as market development through regional expansion or diversification into new industries like UAV management and consultancy services.

• Business Model Canvas (BMC): The BMC operationalizes the proposed strategies, detailing the value propositions, customer segments, revenue streams, and key activities required for implementation.

Literature on Air Navigation Services and Diversification

Most of ANSP were operated as public services and monopolistic by rules in each of its countries. As public companies, they are focused on giving air navigation services and not commercialization. Nowadays, there are several ANSPs that have started to commercialize their business beyond air navigation as long as the government allows them to commercialize. They try to diversify its potential business by utilizing its sources and capabilities. Several European ANSPs that have implemented commercial business models that have expanded their business into terminal services, aeronautical information, consultations, training, etc. European ANSPs that have declared commercialization are ENAV—Italy, LFV—Sweden, ENAIRE—Spain, NATS—Great Britain, DFS—Germany, and ANS CR—Czech Republic (Tomova, 2016).

• PESTLE Analysis: This framework guides the identification of external factors that could impact the organization’s strategy and performance (Panet al., 2018. A PESTLE analysis was performed on Emirates because it provides an overview of the various macro-environmental factors that the company needs to consider and focuses on external analysis during strategic analysis (Nataraja & Al-Aali, 2011).

• Resource-Based View (RBV): Resources-based theory has offered a conceptual vantage point that is exclusive to strategic management, allowing for an explanation of the diversification decision (Wanet al., 2011). The specific resources to the firm are necessary for the effective execution of entrepreneurial and strategic initiatives. The studies are required to determine the steps that turn these resources into advantages that can improve the performance of the business (Syrigos & Kyrgidou, 2011).

• SWOT Analysis: SWOT helps businesses assess their present state and finds solutions to issues regarding their desired future state. As part of its strategic management process, SWOT analysis is utilized (Buyukozkanet al., 2021). The SWOT analysis of China’s air cargo sector may help to illustrate strategies for advancing its further development by providing a structured examination of the factors relevant to its current and future status (Li, 2020).

• TOWS Matrix: SWOT and TOWS matrices are used to analyze and formulate strategies for Taoyuan International Airport (TIA) to develop features, competitive advantages, and operating strategies (Wang & Hong, 2010). TOWS Matrix develops service improvement strategies to prepare Northport Port Klang Ro-Ro to tap external markets while eliminating and minimizing risks to achieve competitiveness (Zakariamet al., 2022).

• Ansoff’s Matrix: Ansoff’s matrix was used to evaluate the strategies of NATS UK taken in its commercial business. Ansoff’s Matrix from NATS confirmed that NATS Holding utilized all possible strategic directions in the development of its commercial business (Tomova, 2017). Ansoff’s Matrix was utilized to examine two of the largest diversified airline groups, Lufthansa and Emirates, transforming their strategic positioning into actionable and sustainable strategies. It is also identified specific opportunities for development between new and existing business areas to support their growth direction (Redpathet al., 2016).

• Business Model Canvas (BMC): The Business Model Canvas (BMC) is a practical framework that offers a visual and structured approach to define, design, analyze, and innovate business models (Osterwalder & Pigneur, 2010). BMC visualizes the innovative business models of Ghanaian creative entrepreneurs and how they have changed in response to the COVID-19 pandemic. The results show a shift in business models among creative entrepreneurs, who are embracing digitalization and diversification in response to the COVID-19 pandemic (Kiluet al., 2022). Diversification in the airline industry entails constantly reviewing and adjusting business models and operational portfolios. This includes broadening geographic networks, focusing on diverse market niches, and introducing new customer offerings to boost competitiveness and revenue streams (Paraschiet al., 2024).

Methodology

The research design offers a structured and comprehensive approach to analyze AirNav Indonesia’s current state, identify areas for improvement, and develop strategies for achieving financial sustainability through new revenue streams. The structure, methods, and techniques employed to collect and analyze data are all part of the research design.

This research begins with research questions and how to answer them. Based on this, we then determine the scope and objectives of the study, ensuring focus: finding potential income streams and how to implement them.

Research Design

The conceptual framework provides a roadmap for the research. It combines theoretical principles with practical implementations to assess AirNav’s present status, formulate strategies, and recommend viable solutions:

1. Current Condition of AirNav:

• This stage uses RBV, PESTLE, and SWOT to examine AirNav’s internal resources, external environment, and overall situational standing.

• RBV highlights AirNav’s unique resources and capabilities.

• PESTLE is a framework that evaluates the impact of external factors on AirNav’s operations.

• SWOT provides a situational analysis of AirNav to provide a comprehensive understanding of the organization’s strengths, weaknesses, opportunities, and threats.

2. Developing Strategies: The insights from the current condition analysis guide the development of actionable strategies to address identified issues.

3. Proposed New Strategies (TOWS Matrix + Ansoff’s Matrix): Using the TOWS Matrix, the strategies are aligned with internal and external factors to create actionable plans. Ansoff’s Matrix provides growth paths like market penetration, market development, product development, and diversification.

4. Implementation plan (BMC): This part serves as a critical bridge between the proposed strategies and the goals, outlining specific activities and their implementation.

5. Potential new revenue stream: This stage provides AirNav potential revenue streams.

Data Collection Methods

The collection of data is an essential component of this research because it enables the gathering of pertinent information that can be used to provide answers that are appropriate to the research questions. Through the utilization of both primary and secondary sources, this investigation was able to accomplish the goal of achieving a comprehensive understanding of the subject matter.

• Quantitative data collection is a research method that collects numerical data, or data that can be quantified and statistically analyzed.

• Primary data comes from qualitative data, which is collected using non-numerical, text-based, and/or visual data to gain information about people’s experiences, opinions, perceptions, and behaviors. The data is used to evaluate current conditions.

Analytical Frameworks

Strategic management tools used in this research in analyzing the data expected to provide the desired results:

• PESTLE Analysis: Examines the impact of political, economic, social, technological, environmental, and legal factors on AirNav. PESTLE analysis helps to understand the political, economic, social, technological, legal, and environmental factors that influence the viability and success of Ultra Long-Haul (ULH) services, long-distance flights of more than 14.5 hours or a minimum of 12,842 km, which remains relevant to an industry emerging beyond the COVID-19 outbreak. That analysis allows the study to consider various external factors that can impact the development and sustainability of ULH operations in a post-COVID-19 era (Baueret al., 2020).

• Resource-Based View (RBV) Analysis: Evaluates AirNav’s internal resources and capabilities and categorizes them into strong resources that give a competitive advantage. Air Asia use RBV in strategic internal analysis to achieve competitive advantages, and it chooses to implement First Mover Advantages and Knowledge Management. RBV helped Air Asia to discover its business model (Liang, 2012). The intangible resources are crucially important of Airlines models for competitive advantage. According to RBV, their core resources are important to create a competitive advantage from an internal perspective (Pearsonet al., 2015). While Kenya Airways leverages the external rationale network to create a competitive advantage in the face of globalization. External relationship capabilities improved knowledge sharing, enhanced market focus, and improved market entry and penetration (Nkatha, 2022).

• SWOT Analysis: Conducts a situational assessment to identify correlations between AirNav’s strengths, weaknesses, opportunities, and threats. A SWOT analysis helps a company figure out where it stands right now and what steps it needs to take to reach its future goals (Gurel & Tat, 2017).

• Strategy Development Tools: TOWS Matrix: derived from SWOT to utilize to align internal and external factors for strategic decision-making. The internal factors are the factors that a company can control, while (Sarsby, 2012). While Ansoff’s Matrix explores growth opportunities across existing and new products or markets.

• Implementation Tools: Business Model Canvas (BMC): Provides a structured framework for operationalizing and visualizing new strategies. Airport management is changing their business models in response to COVID-19 to restructure key components of their business models. BMC is used to model airport businesses as they diversify their revenue streams, introduce more flexibility into their cost base, Enhance digitalisation and operational efficiency, and Sustainability focused approach (Colaket al., 2022).

Respondent Mapping

To conduct data collection, it is important to identify respondents who are suitable to answer research questionnaires and interviews according to their expertise and position at AirNav. Mapping respondents to research questions through interviews as shown in Table I.

Table I. Mapping Respondents to Interview Questions

No	Area	Respondent
1.	Finance	Head of Finance
2.	Corporate strategy	Pres Dir, Head of Corporate Planning
3.	Air navigation operational	Head of Operation
4.	Data operational	Head of Data, Head of IT
5.	Human resource	Head of Human Resource
7.	Technology	Head of Engineer, Head of IT
8.	Costumer	Head of Transaction, Head of Operation
9.	Regulation	Pres Dir, Head of Legal

Methodological Flow

The research progressed as follows:

1. Data collection: Combining quantitative statistics with qualitative narratives to ensure a nuanced understanding.

2. Analysis: Using the frameworks to synthesize findings and identify strategic opportunities.

3. Strategy formulation: Aligning findings with diversification pathways.

4. Implementation plan: Suggesting the plans of implementation of strategies to the organization.

Result and Discussion

This session provides an in-depth evaluation of the findings obtained from quantitative and qualitative data collection techniques. The purpose is to evaluate the feasibility of the new revenue stream proposal. It also evaluates the feasibility of strategic approaches that integrate insights from PESTLE, RBV, SWOT, TOWS, and Ansoff frameworks. This analysis provides a robust internal and external evaluation that may produce new strategies that can be followed up and implemented with BMC to visualize new business models after diversification.

Analysis of Current Condition

PESTLE Analysis

PESTLE Framework provides information from external of AirNav that affected to organization. Findings from quantitative and qualitative data show:

• Political: AirNav complies with government policies, such as enhancing air connectivity and supporting tourism destinations.

• Economic: After COVID-19, world economic trends are confronting difficulties: rising inflation; a disrupted global supply chain; and a sharply declining global GDP growth from 6% in 2021 to just below 3% in 2023. Rising oil prices for global aviation affected airline operating expenses and ticket prices grew (International Air Transport Association (IATA), 2023). AirNav’s operational resilience and recovery strategy depend much on government support following COVID-19.

• Social: The Indonesian government’s initiative to develop eight new tourism destinations aims to accelerate economic growth in the post-pandemic era (PERUM LPPNPI, 2023a; PERUM LPPNPI, 2023b). AirNav Indonesia plays a crucial role in enabling the connectivity required for these destinations to flourish.

• Technological: ICAO has Technology Roadmaps to improve safety and efficiency for air navigation service providers. ICAO responses the technologies being proposed to address aviation needs for increased safety, capacity and efficiency by making Technology Roadmaps for aviation (International Civil Aviation Organization (ICAO), 2016).

• Environmental: Climate change affected AirNav operationally, and ICAO committed to reduce carbon emissions by announcing the Carbon Offsetting and Reduction Scheme (CORSIA).

• Legal: AirNav complies with international standards. As a member of the International Civil Aviation Organization (ICAO), aligns with recommendations from ICAO. There are around 404 national regulations governing AirNav’s operations and business and 554 rules and documents about civil aviation.

Resource-Based View (RBV)

The Resource-Based View of AirNav highlights its internal resources and categorizes them into tangible and intangible resources, heterogeneous and immobile features, and alignment with the VRIO framework. RBV shows which resources have strong power to support AirNav operating its business and to enhance competitive advantage in the aviation industry. These resources are expected to support AirNav’s business diversification.

• Tangible: AirNav’s tangible resources are physical assets in the form of production equipment (communication, navigation, surveillance, automation), finances, technology infrastructure, training center, and repair center.

• Intangible Resources: AirNav intangible resources are monopoly status, good relationships, experience, navigation data, culture, innovation, and technology.

A summary of AirNav’s tangible, and intangible resources and capabilities can be summarized in Table II.

Table II. Resources and Capabilities of AirNav

No	Tangibles	Intangibles	Capabilities
1.	Production equipment	Monopoly	Air navigation management
2.	Operational and office building	Good relationships	Good corporate governance
3.	Technology infrastructure	Experiences	Safety and risk management
4.	Training center	Navigation data	Stakeholder collaboration
5.	Repair center	Culture	Innovation and digital transformation
6.	Financial	Market (air space)	Human resources management capability
7.		Skilled workforce	Enhanced human resource competency
8.		Innovations	Maintaining navigation system
9.		Training mechanism
10.		Maintain and repair procedure
11.		Regulations and SOP

Table III shows the results of classification of tangible, intangible, and capabilities resources as heterogeneous resources.

Table III. Heterogeneous Results

Types	No	Resources
Tangible	1.	Production equipment
	2.	Operational and office building
	3.	Technology infrastructure
	4	Repair center
Intangible	5.	Monopoly
	6.	Good relationships
	7.	Experiences
	8.	Navigation data
	9.	Culture
	10.	Market (air space)
	11.	Skilled workforce
	12.	Innovations
	13.	Training mechanism
	14.	Regulations and SOP
Capabilities	15.	Air navigation management
	16.	Safety and risk management
	17.	Innovation and digital transformation
	18.	Enhanced human resource competency
	19.	Maintaining navigation system

Table IV shows the results of the classification intangible and capabilities resources as immobile resources. There are no tangible resources that can be classified as immobile resources because most tangible resources of AirNav are easily replicated by other companies.

Table IV. Immobile Results

Types	No	Resources
Intangible	1.	Monopoly
	2	Experiences
	3.	Navigation data
	4.	Market (air space)
	5.	Skilled workforce
Capabilities	6.	Air navigation management
	7.	Safety and risk management

• VRIO Framework: RBV analysis based on VRIO framework concludes that AirNav has competitive advantages as below:

1. Categorized resources as heterogeneous and immobile means the resources are unique and difficult to replicate by the competitors as shown in Table V. Those resources have to be protected, leveraged, and maximized to maintain AirNav’s sustainability.

2. The resources are categorized only as heterogeneous, meaning the resources are unique but easy to replicate by the competitors as shown in Table VI.

Table V. AirNav’s Resources are Categorized as Heterogeneous and Immobile

No	Resources	Heterogeneous	Immobile	Impact on competitive advantage (VRIO)
1.	Monopoly	✓	✓	Sustained Competitive Advantage
2.	Experiences	✓	✓	Sustained Competitive Advantage
3.	Navigation data	✓	✓	Unused Competitive Advantage
4.	Market (air space)	✓	✓	Sustained Competitive Advantage
5.	Skilled workforce	✓	✓	Sustained Competitive Advantage
6.	Air navigation management Capabilities	✓	✓	Sustained Competitive Advantage
7.	Safety and risk management Capabilities	✓	✓	Sustained Competitive Advantage

Table VI. AirNav’s Resources are Categorized as Heterogeneous

No	Resources	Heterogeneous	Immobile	Impact on competitive advantage (VRIO)
1.	Production equipment	✓	✗	Temporary Advantage
2.	Operational and office building	✓	✗	Temporary Advantage
3.	Technology infrastructure	✓	✗	Temporary Advantage
4.	Repair center	✓	✗	Temporary Advantage
5.	Good relationships	✓	✗	Temporary Advantage
6.	Culture	✓	✗	No Competitive Advantage
7.	Innovations	✓	✗	Temporary Advantage
8.	Training mechanism	✓	✗	Temporary Advantage
9.	Regulations and SOP	✓	✗	Temporary Advantage
10.	Innovation and digital transformation capabilities	✓	✗	Sustained Competitive Advantage
11.	Enhanced human resource competency capabilities	✓	✗	Temporary Advantage
12.	Maintaining navigation system capabilities	✓	✗	Temporary Advantage

SWOT Analysis

The SWOT Analysis offers a thorough evaluation of AirNav Indonesia’s internal strengths and weaknesses, alongside external opportunities and threats:

• Strengths: Excellent air navigation services and well-developed infrastructure and technology help AirNav to guarantee safety. With no debt and a good financial situation, AirNav gains from government investment to upgrade air navigation systems.

• Weaknesses: Heavy reliance on air navigation services as the primary income source exposes AirNav to vulnerabilities during crises, such as the COVID-19 pandemic.

• Opportunities: The fast development of UAV technologies offers opportunities for diversification into UAV traffic management systems.

• Threats: Global economic downturns and rising oil prices can reduce airline profitability, regional conflicts, international airspace management regulatory shifts, and competitor adoption of advanced technologies.

The summary of AirNav’s SWOT Analysis is shown in Table VII.

Table VII. Summary of the Highlighted SWOT Analysis of AirNav

Factors	No	Condition
Strengths	1.	Sole Air Navigation Service Provider in Indonesia
	2.	Using advanced technology
	3.	Repair center
	4.	Ongoing digital transformation
	5.	Strong stakeholder relationships
	6.	Well-trained personnel certified
	7.	Training center
	8.	Strong financial stability and support investment from Government
Weaknesses	9.	Single source of income
	10.	Gap of upskilling of workforce and technology
	11.	Infrastructure challenges in remote area
	12.	Fluctuations in air traffic demand
Opportunities	13.	Advancement of UAV technologies
	14.	Advancement of technology and digital transformation influence air navigation
	15.	Increased domestic tourism and international air traffic
	16.	ASBU technology framework
Threats	17.	Global economic downturns or increasing oil prices
	18.	Regional conflicts and regulatory shifts in international airspace
	19.	Competitors adopting advanced technologies

Strategy Development

TOWS Matrix

The TOWS Matrix integrates findings from the SWOT analysis to create actionable strategies by combining internal factors (Strengths and Weaknesses) with external factors (Opportunities and Threats).

Fig. 1 presents a strategy resulting from the TOWS analysis which is a combination of strengths and weaknesses as well as opportunities and threats. Each component of strengths and weaknesses is interspersed with opportunities and threats to produce a strategy to empower strengths to take advantage of opportunities and reduce the risk of external threats, overcome weaknesses by taking advantage of opportunities and eliminate weaknesses to avoid threats.

Fig. 1. TOWS matrix.

After weighting, it is necessary to combine strategies that have the same goal. Once combined, there is a streamlined strategy from TOWS that can be applied as seen in Table VIII.

Table VIII. TOWS Streamlined Strategy of TOWS

No	Streamlined strategy	Score
1.	Expand into UAV traffic management and develop digital platforms for consultancy and subscription services.	5.00
2.	Modernize navigation infrastructure and drive digital transformation through IoT and stakeholder partnerships.	5.00
3.	Enhance workforce capabilities through training on ASBU, UAV technologies, and emerging fields.	4.65
4.	Strengthen regulatory compliance and stakeholder engagement with consultation and training on regulations.	4.65
5.	Optimize operations and flight efficiency using predictive analytics and collaboration with airlines.	4.35
6.	Invest in R&D to develop cutting-edge systems for green navigation and AI-driven air traffic management.	3.65

Ansoff’s Matrix

The Ansoff’s matrix provides the possibility for AirNav to diversify its revenue. Using existing resources, the analysis maps current services, markets, and offers potential services to current markets, penetrates current services to new markets, and creates new services, and explores new markets. Fig. 2 shows the results of the Ansoff analysis and Fig. 3 shows current products/services and potential products/services, current markets and potential new markets.

Fig. 2. Ansoff’s matrix.

Fig. 3. Current products/services and potential products/services, current markets and potential new markets.

Similar to the TOWS strategy, the results of Ansoff’s Matrix also need to be evaluated to prioritize the strategies with the most potential for implementation by focusing on impact, feasibility, and alignment with the company. Table IX shows the results of the Ansoff strategy weighting evaluation.

Table IX. Final Streamlined Strategy List of Ansoff

Quadrant	Strategies	Impact(40%)	Feasibility(35%)	Alignment(25%)	Total score
Market penetration	• Improve operational efficiency of air navigation services with advanced tools like predictive analytics. • Strengthen stakeholder relationships with customer-tailored support. • Modernize aviation infrastructure to give excellent services. • Integrated and seamless data interoperability. • Enhance green navigation solutions using PBN and ADS-B.	1.92	1.64	1.22	4.78
Market development	• Expand services to UAV traffic management services. • Expand data integration and communication into UAV operators, airports, and neighboring ANSPs. • Provide aeronautical information for UAV operators, airports, and tourism accommodations. • Provide aeronautical meteorology information for UAV operators and airports.	1.80	1.47	1.05	4.32
Product development	• Build digital platforms that provide airspace analytics and real-time data sharing for airlines. • Launch new training programs focused on aviation for airlines. • Offer aviation consultancy and regulatory training to airlines.	1.93	1.53	1.25	4.71
Diversification	• Launch UAS (Unmanned Aircraft Systems) traffic management. • Provide digital solutions and airspace analytics for UAV operators, airports, tourism accommodations, neighboring ANSPs, and other institutions. • Offer aviation consultancy and aviation training to UAV operators, government authorities, and airports.	2.00	1.53	1.25	4.78

Proposed Strategies

Through the combined insights of the TOWS Matrix and Ansoff’s Matrix, three key strategies have been identified to explore potential revenue streams that align with the organization’s vision and market trends:

• Launch UAS (Unmanned Aircraft Systems) traffic management.

• Provides digital solutions and airspace analytics, real-time data.

• Offer aviation consultancy and aviation training.

Implementation of Strategies

Implementation Plan

The following implementation planrepresents the author’s proposed approach for executing the identified strategies as shown in Table X. It serves as a high-level framework that outlines the necessary steps and phases for successful implementation. The specifics of each step, including detailed actions, timelines, and criteria, should be thoroughly discussed, refined, and agreed upon by AirNav’s management team to ensure alignment with organizational goals and operational feasibility.

Table X. Implementation step and duration

No	Implementation step	Duration
1.	Collaborate with government regulators and private UAV operators to establish operational frameworks.	6 months
2.	Develop infrastructure and software platforms for UAV traffic management.	12 months
3.	Create subscription-based services for UAV traffic monitoring and analytics.	6 months
4.	Integrate AI and green technologies to optimize UAV routes.	6 months
5.	Partner with stakeholders (e.g., airports, tourism boards) to co-develop tailored digital tools.	6 months
6.	Build platforms that offer real-time analytics for airspace usage tailored to UAV operators, airports, and tourism agencies.	12 months
7.	Monetize the platform through data licensing agreements and subscription services.	9 months
8.	Develop customized training modules for emerging aviation technologies and sustainable navigation practices.	12 months
9.	Leverage AirNav’s training center to provide advanced programs for UAV operators, government authorities, and airports.	9 months
10.	Offer consultancy on airspace management, compliance with ICAO frameworks, and UAV integration.	6 months

Fig. 3 presents the time plan for implementing the strategic actions. The total implementation is planned for 36 months, with sequential or parallel implementation, depending on the significance of the implementation. Implemented in parallel if it does not interfere with other implementations and there are no prerequisites; implemented sequentially if certain conditions must be met beforehand.

Business Model Canvas (BMC)

Fig. 4 shows AirNav’s new Business Model if it implements diversification strategies. The revenue diversification that AirNav will undertake will shift the company’s business processes by reaching new markets and new customer segments. Without changing the current business processes, the new Airnav BMC offers new business process visualization by adding new components to each BMC element.

Fig. 4. Implementation time.

In the customer segment, the new BMC (shown in Fig. 5) describes the addition of several new customers, namely UAV operators, travel agents, air navigation service providers (ANSP) of neighboring countries and airports. In addition to being AirNav partners, ANSP of neighboring countries and airports in their new business model are also customers for digital solutions, training and consulting offered by AirNav.

Fig. 5. New airnav’s business model canvas.

New value propositions offered by AirNav are UAV traffic management system, digital platform for airspace analysis, aviation training and consultation. Meanwhile, customer relationships that must be established with new customers are collaborative partnerships with UAV operators, service subscriptions and making contracts with travel agents for the use of flight data. The channels that AirNav must create to reach new customers are in the form of an online platform for digital solutions, online application training, conducting UAV operator gatherings and opening aviation consultancy forum media.

AirNav expects new revenues in its efforts to diversify in the form of bills for UAV traffic management, subscription fees for digital platforms and analytics, consultancy fees, training program fees, and data licensing.

To realize its business diversification, AirNav needs to collaborate with new partners, especially in the field of digital technology, which is outside the company’s core business. Those who must be invited to collaborate are technology providers for IoT, artificial intelligence (AI), digital platform developers and UAV manufacturers.

New activities formed as a result of diversification are managing UAVs, building and maintaining digital services, designing and providing training on the world of aviation and providing consulting. And to support all of that, the resources that need to be provided are in the form of a digital platform for airspace analytics, UAV management systems, trainers, consultants and training materials. As a result of the increase in new operational activities, it will affect the company’s cost structure in the form of UAV system construction and development costs, digital platform development costs, marketing costs to reach new customers and research and development costs using AI.

Conclusion and Recommendation

Conclusion

This study identified the critical need for AirNav Indonesia to diversify its revenue streams beyond traditional air navigation services.

The findings that result from all framework tools in this research, new potential revenue streams for AirNav, are:

1. Launch UAS (Unmanned Aircraft Systems) traffic management.

2. Provides digital solutions and airspace analytics, real-time data.

3. Offer aviation consultancy and aviation training.

The implementation of the diversification strategy at AirNav is planned for 36 months by planning activities that are the objective actions of the proposed strategy. The proposed strategy is broken down into 10 objective plans:

1. Collaborate with government regulators and private UAV operators to establish operational frameworks for 6 months.

2. Develop infrastructure and software platforms for UAV traffic management for 12 months.

3. Create subscription-based services for UAV traffic monitoring and analytics for 6 months.

4. Integrate AI and green technologies to optimize UAV routes for 6 months.

5. Partner with stakeholders (e.g., airports, tourism boards) to co-develop tailored digital tools for six months.

6. Build platforms that offer real-time analytics for airspace usage tailored to UAV operators, airports, and tourism agencies for 12 months.

7. Monetize the platform through data licensing agreements and subscription services for nine months.

8. Develop customized training modules for emerging aviation technologies and sustainable navigation practices for 12 months.

9. Leverage AirNav’s training center to provide advanced programs for UAV operators, government authorities, and airports duration nine months.

10. Offer consultancy on airspace management, compliance with ICAO frameworks, and UAV integration duration 6 months.

Listed below in Table XI, are the primary distinctions that exist between the current state of AirNav and the strategies that have been proposed:

Table XI. Before and After the Diversified Revenue Streams

Aspect	Before	After
Revenue streams	Reliant on air navigation fees from airlines.	Diversified revenue sources, including UAV traffic management, digital solutions, consultancy, and training.
Technology utilization	Limited focus on emerging technologies like UAV traffic management and AI.	Integration of cutting-edge technologies, such as AI-driven analytics, IoT, and green navigation systems.
Service offerings	Traditional air navigation services (communication, aeronautical data, MET).	Expanded services, including UAV traffic management, real-time airspace analytics, and aviation training.
Customer segments	Primarily airlines.	Broader customer base, including UAV operators, tourism agencies, government agencies, and ANSPs.
Operational efficiency	Dependence on traditional systems with limited predictive capabilities.	Optimized operations using predictive analytics and advanced digital platforms.
Stakeholder engagement	Long-term contracts with airlines and basic regulatory compliance relationships.	Enhanced collaboration with UAV operators, tourism agencies, and tech providers for shared growth initiatives.
Workforce capabilities	Workforce focused on traditional air navigation operations.	Upskilled workforce trained in ASBU, UAV technologies, and digital transformation.
Market position	Sole ANSP in Indonesia with limited regional presence.	Expanded regional influence through consultancy, training, and UAV-related services for neighbouring ANSPs.
Risk exposure	High vulnerability to economic downturns and air traffic demand fluctuations.	Reduced risk through diversified income streams and scalable operational systems.

Recommendations

1. To accelerate the implementation of diversification strategies, AirNav should prioritize developing its UAV, digital service, aviation consultancy, and aviation training, as these represent high-impact and feasible strategies for immediate diversification.

2. Collaborations with airlines, airports, and government agencies should focus on infrastructure modernization and regulatory compliance, creating shared value.

3. Establishing a robust training framework aligned with emerging technologies ensures long-term sustainability and competitiveness.

4. Introduce financial models to build reserves that cushion against economic downturns, supported by a diversified portfolio.

AirNav Indonesia can transition from its current vulnerable state to a robust, diversified business model capable of withstanding external shocks while pursuing sustainable growth.