Govt insists on licensing more airlines

JAKARTA (JP): The government defended on Friday a recent decision to allow more scheduled airlines to operate in the country.

Secretary General of the Ministry of Communications Anwar Suprijadi said the decision was taken in a bid to promote fair competition in domestic airline services.

Permitting more scheduled airline operators would not hurt the existing operators, he said, adding that there were plentiful opportunities to open new routes in the vast archipelago.

"The decision will instead encourage the existing scheduled airline operators to promoted their services," he said.

Newly established Indonesian Airlines Avipatria recently obtained a license to operate scheduled flights on 46 routes, most of which were previously served by the defunct Sempati Air.

The Ministry of Communications is expected later this year to award similar licenses to Pelita Air Service, a chartered airline operator owned by state oil and gas company Pertamina, and new air carrier Mentari Airlines, which will provide scheduled flights.

Indonesian Airlines said it would commence operations in January 2000, while Pelita and Mentari are expected to follow suit in the same year.

The National Air Carriers Association (INACA) criticized last week the government's policy on scheduled airlines, describing the move as "ill-timed".

INACA's outgoing chairman Soelarto Hadisoemarto said the country's scheduled airline industry did not need new air carriers. He said their condition remained vulnerable after the downturn caused by the prolonged economic crisis.

Soelarto said the sharp depreciation of the rupiah to the U.S. dollar from late 1997 hurt the industry because most airlines' rupiah earnings were eaten up by overhead costs, over 80 percent of which were quoted in U.S. dollars.

However, newly elected INACA chairman Wahyu Hidayat acknowledged on Friday that the entrance of new scheduled airlines could not be avoided.

"We are in the globalization era. Sooner or later we are going to meet more competitors," he said after being elected as chairman at an INACA members meeting.

Indonesia has five scheduled airlines, namely state-owned Garuda and Merpati Nusantara Airlines and privately-owned Bouraq, Mandala and Dirgantara Air Service, as well as 56 chartered air carriers.

Anwar said that in order to help the ailing local airline industry, the government would soon revoke a government decree, which requires the industry to buy light aircraft from IPTN, the state-owned national aircraft manufacturer.

Under the regulation, the local airlines must also obtain approval from the Ministry of Communications, the office of the state minister of research of technology, and the president to buy wide-bodied jets. (cst)