RI airlines boom as others cut back<\/p>\n
Slobodan Lekic, Associated Press, Denpasar, Bali<\/p>\n
The launch of Air Paradise International in February couldn't
\nhave come at a worse time.<\/p>\n
The Bali-based airline's maiden flight was delayed for three
\nmonths after the Oct. 12 terrorist attacks on the island in which
\n202 people died. When it finally took to the air Feb. 16, it had
\nto contend not only with a slump in travel to Bali, but also with
\nthe looming war in Iraq.<\/p>\n
\"On top of that, we now have to deal with SARS,\" owner Kadek
\nWiranatha said, referring to severe acute respiratory syndrome,
\nthe contagious flu-like illness that has ravaged air travel
\nthroughout Southeast Asia.<\/p>\n
Still, Wiranatha is optimistic that Air Paradise will prosper
\nin the burgeoning aviation market in Indonesia, where air travel
\nis the primary means of getting around the country's 13,000
\nislands scattered over an area the size of the United States.<\/p>\n
While many airlines worldwide are cutting back, coping with
\nempty seats and mounting losses, Indonesia is seeing an
\nunprecedented boom with packed planes and new domestic carriers
\nvying for a place in the sky.<\/p>\n
By the end of 2002, there were 22 airlines in the country, up
\nfrom five in 1998 when the Asian financial crisis devastated
\nIndonesia's economy. At least four more are seeking approval to
\nstart flying this year, officials said.<\/p>\n
The 1998 crisis slashed passenger numbers by more than half,
\nfrom 13.4 million in 1998 to 6.2 million the following year, said
\nSantoso Eddie Wibowo, director of civil aviation at the Ministry
\nof Transport. But since then, he said, ticket sales have steadily
\ngrown and are expected to surpass pre-crisis levels this year.<\/p>\n
A factor in the expansion is that entrepreneurs can get planes
\nmore cheaply now, said Srboljub Savic, a consultant and expert in
\nIndonesian civil aviation.<\/p>\n
\"It owes much to the post-Sept. 11 airline problems in the
\nUnited States, which have idled a large number of passenger jets
\nand made them available for leasing at rock-bottom rates,\" Savic
\nsaid.<\/p>\n
Medium-range jets such as a Boeing 737-300 can be picked up
\nfor US$45,000 a month, compared to US$120,000 two years ago,
\nSavic said.<\/p>\n
There are now about 200 medium and long-range jets in airline
\nfleets in Indonesia, almost double the number four years ago. The
\ntypical startup airline has about half-a-dozen 737 or MD-82 jets
\nin its fleet, Savic said.<\/p>\n
Other factors fueling the boom include airline deregulation
\nand an overvalued currency - making it easier to pay fixed costs
\npegged in U.S. dollars.<\/p>\n
A price war is now raging in Indonesian skies among domestic
\ncarriers with names such as Batavia Air, Lion Airlines, Nurman
\nAvia and Star Air.<\/p>\n
With dozens of flights a day from Jakarta to other large
\ncities, ticket prices have plunged so much that intercity bus
\ndrivers see airliners as competitors and have taken to blockading
\naccess to airports.<\/p>\n
A ticket for the two-hour flight between Jakarta and Medan, a
\ncity 1,400 kilometers (900 miles) away, goes for as little as Rp
\n450,000 (US$50).<\/p>\n
Elsewhere in Asia, wave upon wave of bad news has battered the
\nalready depressed aviation industry.<\/p>\n
Flights to Europe, the United States and Australia were cut
\nback due to the war in Iraq. The outbreak of SARS, which has
\nkilled more than 130 people worldwide, has caused a further
\ndownturn.<\/p>\n
The region's largest operator, Singapore Airlines, has
\nannounced possible staff layoffs and flight reductions. Hong
\nKong-based Cathay Pacific Airways said that SARS fears caused its
\ntraffic to plunge from 30,000 passengers a day to below 10,000.<\/p>\n
Indonesia's flag carrier Garuda, with an extensive overseas
\nnetwork, has been similarly affected by these crises.<\/p>\n
Although Air Paradise flies only between Bali and the
\nAustralian cities of Melbourne and Perth, its managers feel
\nconfident they can weather the storm by targeting a lucrative
\nmarket segment. It operates two Airbus A310-300 wide-body jets
\nleased from Singapore Airlines, and says its load factors have
\naveraged between 70 percent and 80 percent.<\/p>\n
\"We have been doing very well, much better than expected,\"
\nsaid Wiranatha, whose family also owns a string of hotels and
\nnightspots on Bali. \"Let's just hope SARS doesn't slam us too
\nhard.\"<\/p>",
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