FDI in national airlines to be limited

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