INACA blasts government over new airlines<\/p>\n
JAKARTA (JP): The Indonesian National Air Carriers Association
\n(INACA) expressed concerns on Friday over the government's recent
\npolicy to award licenses to new scheduled airlines, describing it
\nas an ill-timed move.<\/p>\n
INACA chairman Soelarto Hadisoemarto said the country's
\nscheduled airline industry was still in a frail condition after
\nbeing severely hit by the economic crisis and that it did not
\nurgently need new air carriers.<\/p>\n
\"There is no need so far to have more scheduled airlines,
\nunless the new airlines are focusing on parts in eastern
\nIndonesia. If that is the case, then we agree to it (the
\npolicy),\" he said.<\/p>\n
The government would have understood the real situation facing
\nthe airline industry if it had consulted INACA on the matter
\nbeforehand, he said, adding the previous government usually
\nconsulted with INACA on any plans to add or reduce the country's
\nfleet capacity.<\/p>\n
The Directorate General of Air Transportation of the Ministry
\nof Communications recently awarded a license to newly established
\nIndonesian Airlines Avipatria to operate scheduled flight service
\non 46 routes, most of which were previously served by the defunct
\nSempati Air.<\/p>\n
The directorate also awarded a license to chartered airline
\nPelita Air Service, which is owned by state oil and gas company
\nPertamina, to operate as a scheduled airline. The directorate was
\nexpected to award this year another new air carrier, Mentari
\nAirlines, a license to operate as a scheduled airline.<\/p>\n
Indonesian Airlines said it would commence operation in
\nJanuary 2000, while Pelita and Mentari are expected to follow
\nsuit in the same year.<\/p>\n
INACA secretary-general Bachrul Hakim said the existing
\nscheduled airlines were still struggling to recover from the
\nfinancial plight they had been facing since the economic crisis
\nhit the country in mid-1997.<\/p>\n
Bachrul, who is the commerce director of national airlines
\nGaruda Indonesia, said the sharp depreciation of the rupiah to
\nthe U.S. dollar since late 1997 hurt the industry because most
\nairlines' rupiah earnings were eaten up by overhead costs, over
\n80 percent of which were quoted in U.S. dollars.<\/p>\n
\"The condition is so bad that airlines will still suffer
\nlosses even when they fly in full capacity because the yields are
\nnot adequate to cover the aircraft lease fee alone,\" he said.<\/p>\n
Indonesia has five scheduled airlines, namely state-owned
\nGaruda and Merpati Nusantara Airlines and privately-owned Bouraq,
\nMandala and Dirgantara Air Service, in addition to 56 chartered
\nair carriers.<\/p>\n
The country's entire fleet serves 134 routes to over 90
\ndestinations across the archipelago.<\/p>\n
The five scheduled airlines are serving about 65 of the 134
\ntotal routes on an average load factor of 65 percent, which is
\nhigher than the 50 percent average recorded last year.<\/p>\n
Sempati Air closed operations in June last year after
\nshareholders could no longer afford to keep the airline afloat
\namid the prolonged crisis.<\/p>\n
Bachrul said several scheduled airlines had decided to reduce
\nflights and return some leased aircraft in a bid to cut costs and
\nsurvive the crisis.<\/p>\n
Merpati's fleet shrank from between 60 and 90 aircraft in the
\nprecrisis period to a current 29, while flight frequency dropped
\nfrom 344 flights to 270.<\/p>\n
Garuda has cut back 40 percent of its international flights,
\nclipped the frequency of some domestic flights and trimmed down
\nits fleet capacity from 58 units in 1997 to 42 this year.<\/p>\n
Bachrul said the government should have cared more about the
\nfinancial problems currently facing the existing scheduled
\nairlines.<\/p>\n
He said he found it acceptable if the government allowed new
\nairlines to operate on routes which were left unserved following
\nthe bankruptcy of Sempati and the reductions of flights by other
\nairlines.<\/p>\n
\"But we think the government should also help the existing
\nairlines get out of their financial problems,\" he added.<\/p>\n
The government announced a plan early this year to help the
\nailing local airline industry by allocating some $345 million,
\naround $40 million of which was earmarked especially for
\nchartered airline operators. The plan, however, has yet to be
\nrealized.<\/p>\n
The government has predicted the number of airline passengers
\nto reach 6.5 million this year. The estimate is lower than the
\n7.4 million passengers who flew in 1998 and 12 million in 1997.
\n(cst)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/inaca-blasts-government-over-new-airlines-1447893297",
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