Domestic airlines urged to ally with foreign airlines

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)