Sat, 12 Mar 2005

From: AFP

AWAIR says Singapore using it as bargaining chip

Agence France-Presse, Jakarta

The Indonesian arm of budget carrier AirAsia says it was forced to cancel a proposed route because the Singapore government was using it as a bargaining chip in talks with Jakarta over aviation links.

AWAIR, which launched as a cut-price domestic operator last year, had hoped to begin operating flights to Singapore but dropped the plan last month citing a lack of cooperation from the city state's air authorities.

On Thursday, however, the Civil Aviation Authority of Singapore said that the airline's application to fly to Singapore had been rejected because of an unspecified "restriction" imposed by Jakarta.

AWAIR in turn claims its plan was turned down because the CAAS wanted to use the operator as leverage in a bilateral air service agreement between the two countries.

"This is clearly a government-to-government matter and the CAAS should not have used AWAIR as a bargaining chip to gain better positioning with the Indonesian government," AWAIR president Sendjaja Widjaja said in a statement.

Widjaja accused Singapore of trying to safeguard the market share of its own carriers, including Singapore Airlines and low- cost carrier Valuair.

"We believe that it is not so much related to the issue of planned flights by low-cost carriers between the two countries but simply the protectionist stance taken by CAAS to protect Singapore's own fledgling start-ups," Widjaja said.

"This is clearly inconsistent with CAAS statement that it welcomes all airlines, including AWAIR, to operate to Singapore."

The CAAS said in its statement that its decision on AWAIR was purely due to Indonesian restrictions but officials have refused to elaborate on what these were.

It said Indonesian aviation authorities announced in late January their "intention to introduce a new restriction on services by low-cost carriers to/from certain points in Indonesia.

"Accordingly, AWAIR's planned operation to Singapore has been affected by this new development."