Air carriers association oppose open-sky policy

JAKARTA (JP): The Indonesian Air Carriers Association (Inaca) criticized the government's plans to introduce an open-sky policy, saying that such a ruling is unlikely to attract foreign tourists.

Inaca Secretary-General G.B. Rungkat said an open-sky policy was unnecessary, and unlikely to boost the occupancy rates of local hotels.

"This is a prescription based on the wrong diagnosis and ignores both facts and logic," Rungkat said at an airline industry seminar last week.

Existing bilateral agreements between airlines were enough to bring in foreigners to Indonesia, he said.

"Under the agreements...foreign airlines are entitled to enough flights a week, but they are not utilizing their maximum capacities," he said.

"Whatever the problems of the hotel industry, it is not the lack of flight frequency entitlements. In fact, a number of large foreign carriers have reduced their flights to Indonesia," Rungkat said.

He made the statements partly in response to recent suggestions from hoteliers that the government apply an open-air policy to increase the occupancy rates of local hotels.

Rungkat said foreign carriers pulled out of Indonesia because "airlines are not in the business of flying empty seats".

"They have discovered that traffic into, through and from Indonesia is not enough to warrant the utilization of all their frequency entitlements," he said.

"Capacity expansion does not automatically result in additional traffic, thus they figure they are better-off fielding their available capacity elsewhere," Rungkat said.

The government currently applies a limited open-sky policy allowing national and foreign airlines to operate direct flights from tourist-generating countries to various tourist destinations in Indonesia.

Director General of Air Transportation Zainuddin Sikado told the seminar that for this purpose, Indonesia has opened 23 airports for international services.

"This is to support the national tourist industry and accommodate the needs of the national air-transport industry," he said.

Zainuddin acknowledged that to anticipate the globalization era, the government would continue to promote a competitive environment on the basis of "fair and equitable opportunity and reciprocity to ensure the participation of all air carriers".

"Sovereignty should be respected and there is a general agreement that for the foreseeable future, the bilateral system offers the best prospects for further competitive services," he said.

The limited open-sky policy is currently applied to air routes linking areas in the Indonesia-Malaysia-Thailand Growth Triangle (IMT-GT) and the Brunei-Indonesia-Malaysia-Philippines East ASEAN Growth Area (BIMP-EAGA).

Under an agreement signed by the governments of these sub- regional groups, designated airlines are allowed to establish air linkages (both scheduled and non-scheduled) at service points within the groups.

"Taking the national interest into consideration, the introduction of an open-sky policy should be implemented on a gradual basis," Zainuddin said.

"For the time being, a limited open-sky policy is the best possible approach toward an open-sky policy," he said.

Despite the rulings, the local administration of Irian Jaya last September decided to declare the air over Biak an open-sky area for international airlines.

According to Antara, the decision has yet to be approved by Jakarta. (pwn)