Domestic airlines urged to ally with foreign airlines

JAKARTA (JP): Domestic airlines should form alliances with foreign airlines to cope with more tourists by 2005, Director General of Air Transportation Zainuddin Sikado said yesterday.

"Alliance, partnership or code-sharing arrangements between Indonesian airlines and foreign ones are the only things that will allow our domestic airlines to survive amid fiercer global aviation competition," he said during a break of a hearing with House Commission V for transportation, tourism, public works and housing.

"It's true that Indonesia needs to double the seating capacity of its international air flights to accommodate more foreign tourist arrivals. But the growth of domestic airlines will be hampered if more overseas air carriers serve Indonesia directly."

The government has invited more foreign airlines to serve the country to accommodate more foreign tourists.

Indonesia has six scheduled airlines: Sempati Air, Garuda Indonesia, Merpati Nusantara Airlines, Mandala Airlines, Bouraq Airlines and Dirgantara Air Service.

Sikado said that through code-sharing arrangements or partnerships, domestic airlines would be able to fly people planning to visit destinations beyond the points that foreign airlines serve in Indonesia.

If foreign airlines were licensed to fly to as many destinations in Indonesia as they wanted, domestic airlines would get hurt, he said.

"I don't want an unpleasant situation like that which has occurred to Indonesia in international sea transportation, where domestic shipping firms have been outcompeted by overseas shipping firms."

"Domestic airlines, restricted by a lack of financial resources, are unable to expand their fleets to serve more international routes with various domestic airports," he said.

Sikado said the government was fully aware that domestic airlines could not afford to buy or lease new aircraft.

He said it was unwise to let foreign airlines dominate the local market because they might gain control of fare pricing.

He indicated that if more foreign airlines serviced more destinations in Indonesia, domestic airlines would lose their market.

Director General of Tourism Andi Mappi Sammeng said recently that more overseas airlines should be encouraged to serve Indonesia.

He said the seating capacity of international flights to the country should double to 13 million if it was to meet its target of 6.5 million annual tourist arrivals by 1999.

Official data shows that about 70 percent of foreign tourists fly to Indonesia.

There are seats for about seven million people flying to and from Indonesia each year: 30 percent of these are on local airlines and 70 percent on foreign airlines.

Two airline seats are needed for each tourist expected to visit Indonesia. This ratio of seat capacity against tourist arrivals is calculated on the assumption that a jet generally has a 70 percent load factor, which includes Indonesians traveling abroad.

Indonesia is served by 37 foreign airlines. There are 23 airports which can act as gateways to the country.

Sikado said yesterday Indonesian and Canadian officials would meet tomorrow to discuss possible air links between the two countries.

Indonesia and Canada signed a preliminary accord last year on air links, which have not been realized because of disagreements on service routes.(icn)