FDI in national airlines to be limited

The government said on Monday that it would limit foreign ownership in national airline companies to a maximum 49 percent to protect the continuance of air transportation in the country.

Director-general of air transportation Soenaryo said that the limitations were necessary to prevent capital flight in times of trouble.

"We need continued air transportation service, and if foreigners withdraw their capital (in times of trouble) how will we maintain service?" he said on the sidelines of a seminar on the proposed revision of the 1992 Air Transportation Law.

Soenaryo also said the limitations of foreign investment reflects the reality within the national airline industry.

"The reality is that national airlines are owned by domestic investors, and not by foreign owners," he said.

Soenaryo said that despite the government's efforts to give free reign to foreign investment opportunities in the airline industry last year, there had been no foreign investors interested in the sector.

He said that the limitation was previously discussed with the Ministry of Finance and had been approved.

The new foreign investment limit in the airline industry will be included in the proposed revision of the 1992 Airline Transportation Law. --JP