Tri S. Sunoko told Reuters that the state-owned company has set 2015 as a completion date for its project at Soekarno-Hatta, Jakarta's main airport which can barely cope with the surge in passenger traffic that has accompanied Indonesia's economic boom.

"We plan to have a total (annual) capacity of 62 million people by 2015 once the new development project is completed," he said in an interview at his office overlooking the airport's runways.

The official capacity of the almost 30-year-old airport is 22 million people, though it actually handled 52 million in 2011.

The strain on the country's airports in turn could put at risk major plane orders from manufacturers including Boeing (BA.N) and Airbus (EAD.PA) by domestic carriers Garuda Indonesia (GIAA.JK) and the privately held Lion Air.

Liberalisation of the air transport market a decade ago saw the birth of many new airlines, drove prices down and encouraged many Indonesians to use air travel to get around the vast archipelago, said Sunoko, who headed the government's air transportation department until becoming CEO in 2010.

"The demand is 2.5 times the capacity. How can you deliver a good service with the capacity like this?" he said.

The Angkasa Pura development will involve building a train station to connect the airport and central Jakarta, a hotel and a convention hall, he said.

Unlike those in Malaysia and Singapore, Jakarta's international airport lacks railway access, which means passengers frequently have to struggle through grinding traffic jams to reach it.

Angkasa Pura plans to further expand the airport's capacity to 87 million people by 2020, though this would require the purchase of an additional 800 hectares of land by the coast north of Jakarta.

The Jakarta-based company, which operates 12 airports across Indonesia, is also building at least two new airports to service the major North Sumatran city of Medan and the West Kalimantan capital Pontianak.

Angkasa Pura posted 1.1 trillion rupiah of net profit in 2011, up 6 percent from 2010, while revenue jumped 59 percent in the same period.

(Reporting by Janeman Latul; Editing by Matthew Bigg and Jonathan Thatcher)

• A Permanent Economic Emergency