AWAir cancels flights to S'pore from Jakarta

AWAir cancels flights to S'pore from Jakarta

Soraya Permatasari, Bloomberg/Jakarta

AirAsia Bhd., Southeast Asia's largest discount airline, said its PT AWAir International venture canceled all flights to Singapore from Jakarta because Singapore regulators held up permission for it to land there.

The Civil Aviation Authority of Singapore (CAAS) has not indicated when the landing rights will be issued, AirAsia said in a statement on Saturday. AWAir will refund all bookings or customers may transfer their bookings to other destinations, the statement said.

AWAir, the Jakarta-based airline 49 percent owned by AirAsia, had more than 2,000 passengers booked on its S$20 (US$12) service to Singapore until Jan. 26, AirAsia's Chief Executive Tony Fernandes said on Jan. 24. The airline canceled plans to begin the service on Jan. 19, he said then.

AirAsia's decision to scrap its Jakarta-Singapore service may spoil the Singapore government's plan to present the nation's Changi airport as an aviation hub for Southeast Asia. The decision may also mean less competition for Singapore Airlines Ltd., PT Garuda Indonesia and Singapore-based low-fare carrier Valuair Ltd.

Tourism receipts contribute to more than 5 percent of Singapore's US$91 billion economy every year. The government has begun building a new airport terminal at Changi to attract the 10 low-fare airlines flying in Southeast Asia.

The regulator, is "reviewing documents it has received from AWAir," said the authority's spokeswoman Yip Siew Joo on Jan. 24.

On the Malaysia stock exchange, AirAsia's shares fell 0.55 percent to 1.8 ringgit yesterday.

The Indonesian airline competes in Indonesia, an archipelago of more than 18,000 islands and a population of 235 million, with carriers such as PT Adam SkyConnection Airlines, Lion Air Pte. and Singapore Airlines' Tiger Airways Pte.

AWAIR International has two Boeing Co. 737-300 aircraft leased from AirAsia flying within Indonesia and overseas.